Background Independence, Diffeomorphism Invariance, and the Meaning of Coordinates

Diffeomorphism invariance is sometimes taken to be a criterion of background independence. This claim is commonly accompanied by a second, that the genuine physical magnitudes (the "observables") of background-independent theories and those of background-dependent (non-diffeomorphism-invariant) theories are essentially different in nature. I argue against both claims. Background-dependent theories can be formulated in a diffeomorphism-invariant manner. This suggests that the nature of the physical magnitudes of relevantly analogous theories (one background free, the other background dependent) is essentially the same. The temptation to think otherwise stems from a misunderstanding of the meaning of spacetime coordinates in background-dependent theories.