The problems of coarse-graining and averaging of inhomogeneous cosmologies, and their backreaction on average cosmic evolution, are reviewed from a physical viewpoint. A particular focus is placed on comparing different notions of average spatial homogeneity, and on the interpretation of observational results. Among the physical questions we consider are: the nature of an average Copernican principle, the role of Mach's principle, the issue of quasilocal gravitational energy and the different roles of spacetime, spatial and null cone averages. The observational interpretation of the timescape scenario is compared to other approaches to cosmological averaging, and outstanding questions are discussed.
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