What does the N in varchar(N) refer to

What does the N in varchar(N) refer to when describing a field in a database. Is it the number of characters or bytes. Also, one is using UTF-8, a character may use more than one byte.

From stackoverflow

• It's the maximum number of characters.

  nvarchar(1000) = max 1000 unicode chars.

• 1. nr of characters

• varchar cannot hold Unicode characters, so n in varchar(n) means both number of characters and number of bytes. In case of nvarchar(n) the n means the number of Unicode characters, with storage size of two times n bytes.

  If you query information_schema.columns, there will be, among others, two columns of particular interest: CHARACTER_MAXIMUM_LENGTH and CHARACTER_OCTET_LENGTH. The former holds the number of characters, and the latter contains the number of bytes.