Bottom-up vs Top-down Forecasting in Demand Planning

Why is everyone talking about bottom-up and top-down planning? What are they? Are they crucial in the context of demand planning? How do bottom-up vs top-down forecasting compare?

Roughly speaking, in the top-down approach, the management sets the goals and passes them down the line, and in the bottom-up, employees from the lower parts of the organization send the information upwards.