We introduce Cognitive Dimension Reduction (CDR), a framework that sheds light on how individuals simplify the multidimensional world to guide decision-making and comprehension. Our proposal posits that cognitive limitations prompt the adoption of simplified models, reducing the environment to a subset of dimensions. Within these limitations, we propose that individuals exploit both environment structure and goal relevance. Employing Information Theory, we formalize these principles and develop a model that explains how environmental and cognitive factors influence dimension reduction. Furthermore, we present an experimental method for CDR assessment and initial findings that support it.