An absolute electric potential of a point is simply not defined. Only the difference between two points is defined and can be measured,so we are forced to take a reference point's potential. Electrode potential is defined as the potential difference between electrode and electrolyte in which that electrode is immersed. From the above context it should have been a WELL DEFINED term. But still we have to define a reference electrode potential. Why?
Electrical voltage measurements are usually referenced to a stable ground voltage. In an aqueous solution with two electrodes it is often desired to measure the voltages at each electrode with respect to a stable ground voltage. Adding a ground wire to the solution wont work because ground wire electrochemistry (oxidation or reduction) in the solution will give unstable ground voltages. The reference electrode provides the stable ground voltage needed to accurately measure the electrochemical potentials by providing an isolated and stable chemical reaction that produces a known voltage. Electrical contact is mediated by a salt bridge to minimize reference electrode instabilities and analyte contamination.
Why do we favor a reference electrode? Why not just measure the potential of the working electrode relative to the counter electrode?
For operational purposes, the working electrode might have an arbitrary composition whose electrochemical behavior is unknown. The reference electrode has a well-defined and well-studied composition and electrochemical behavior.
Coatings and layers might build up or be etched from the working electrode, altering the behavior. The reference electrode is suitably passive.
The working electrode might be passing a large current that induces Ohmic voltage drops. The reference electrode passes very little current, and the associated circuitry has very high impedance, as all good voltmeters do.
The size and positioning of the working electrode might be constrained, potentially leading to kinetic limitations. We are usually more free to adjust the size and location of the reference electrode.
In short, the use of a third electrode—the reference electrode—allows us to decouple functionality from measurement, or operation from observation. This is useful in precisely controlling the counter reaction, for example.