Excavation is a process that removes unstable elements from underground at the beginning of a paving project. This is a more encompassing process than grading. It’s usually only used when there are known issues that arise during the normal ground stabilization process.
There are different ways to decide whether your ground needs excavating. Outside of a geological analysis, you can perform what is known as a Proof Roll test. During this test, a large, hefty vehicle is driven over the area. Then the ground where the vehicle was driven is inspected for any ruts. That indicates the ground is unstable. If there is a large number of ruts on the area, then excavation is recommended as the next step so that the unstable material can be removed.
This page will tell you more about Driveway Grading