What is the importance of requirements gathering in a project?

Requirements gathering and understanding the project is an essential thing. Before starting any project we need to understand the requirements. What is the purpose of the project? What for the client is making a website? In our office we have started making a website for magazine viewing. In the proposal it was clearly mentioned that magazine should be converted from pdf to swf while uploading from the back end. But we people did it in a reverse way PDF to image conversion. It was totally the mistake of not understanding the requirements. So understanding the requirements is an essential thing for any project.