In general, the term modularity refers to the property of a system in which individual parts can be viewed, separated, and modified independent of the entire system. In a modular system, these individual parts fit cleanly together.
Microformats are designed with this principle in mind. By ensuring that microformats do not contain unecessary dependencies on external resources (such as the URL of the hosting page or other content in the page), microformats can easily be embedded in content.
Due to this modular approach, microformats can also be composed together to create other microformats. This ability to embed one microformat in another is a powerful technique for building new microformats.