Diffeomorphism invariance is the technical implementation of a physical idea, due to Einstein. The idea is a deep modification of the pre-general-relativistic (pre-GR) notions of space and time. In pre-GR physics, we assume that physical objects can be localized in space and time with respect to a fixed non-dynamical background structure. Operationally, this background spacetime can be defined by means of physical reference-system objects, but these objects are considered as dynamically decoupled from the physical system that one studies. This conceptual structure fails in a relativistic gravitational regime. In general relativistic physics, the physical objects are localized in space and time only with respect to each other. Therefore if we ``displace'' all dynamical objects in spacetime at once, we are not generating a different state, but an equivalent mathematical description of the same physical state. Hence, diffeomorphism invariance.

Accordingly, a physical state in GR is not ``located'' somewhere [180, 169, 177] (unless an appropriate gauge fixing is made). Pictorially, GR is not physics over a stage, it is the dynamical theory of (or including) the stage itself.

Loop quantum gravity is an attempt to implement this subtle
relational notion of spacetime localization in quantum field
theory. In particular, the basic quantum field theoretical
excitations cannot be localized somewhere (localized with respect
to what?) as, say, photons are. They are quantum excitations of
the ``stage'' itself, not excitations over a stage. Intuitively,
one can understand from this discussion how knot theory plays a
role in the theory. First, we define quantum states that
correspond to loop-like excitations of the gravitational field,
but then, when factoring away diffeomorphism invariance, the
location of the loop becomes irrelevant. The only remaining
information contained in the loop is then its knotting (a knot is
a loop up to its location). Thus, diffeomorphism invariant
physical states are labeled by knots. A knot represents an
elementary quantum excitation of space. It is not here or there,
since it
*is*
the space with respect to which here and there can be defined. A
knot state is an elementary quantum of space.

In this manner, loop quantum gravity ties the new notion of space and time introduced by general relativity with quantum mechanics. As I will illustrate later on, the existence of such elementary quanta of space is then made concrete by the quantization of the spectra of geometrical quantities.

Loop Quantum Gravity
Carlo Rovelli
http://www.livingreviews.org/lrr-1998-1
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