As I reported last night at Search Engine Land, Google has changed their definition for the "average position" as used in Google Webmaster Tool's search query reports and Google Analytics SEO reports.
Google is now using the top positions and averaging those, as opposed to using all the positions and averaging them. Google explains it best with this:
Let's say Nick searched for [bacon] and URLs from your site appeared in positions 3, 6, and 12. Jane also searched for [bacon] and URLs from your site appeared in positions 5 and 9. Previously, we would have averaged all these positions together and shown an Average Position of 7. Going forward, we'll only average the highest position your site appeared in for each search (3 for Nick's search and 5 for Jane's search), for an Average Position of 4.
Google said that the old reports won't change - instead, the new reports will, so historically this won't make much of a difference.
Google's John Mueller said on Google+, "I think it makes more sense this way." I guess it does.
Either way, this is a big change to the reports with little impact to you or I.
Here is how they look in the Webmaster Tools and Analytics section: