First find specific places in your CAD drawing that can be referenced to a location in the world. For most of my CAD georeferencing I have been fortunate to have section corners or QQD. Often when referencing CAD Plat drawings there will be a reference point and distances. Sometimes in larger drawings it helps a lot to put a POINT on those locations and give it a large obvious symbol. It would be BEST if you can location TWO reference points as far apart as possible.
IF you cannot determine two points but you have a known distance, say along the edge of a series of parcels. Calculate that length from the reference point to the end.
Generally speaking some place you can determine the exact location in ArcGIS
For this example I will use section polygons.
I go into ArcGIS and open the section polygons. I select those that are in the area I am locating. Export them as a shape file. Import the shape file into a NEW autocad drawing. Be sure to import projection data. Import the polygons as closed polylines. Once they are in CAD lock the layer.
Add your drawing to be georeferenced as a block. Z enter E (zoom extents). Make sure all of your drawing layers are visible and unlocked (other than the reference sections). Select all of the drawing elements and drag them close to your reference sections.
Z E again. Now wiht all your elements still selected use MOVE, select one of your reference points and move it to the reference point on your reference sections. IF you feel you need to rotate the drawing and your cad drawing has a East West or North South line then put in a construction line and rotate your drawing using the ROTATE command.
Go back to your section reference point and then use the SCALE command to rescale the CAD drawing between the two reference points.
save your drawing. You should now be able to open it in ArcGIS. In CATALOG you can assign it the projectoin from the shape file.
I once had to convert a 5 county wide electric distribution system that the original CAD technician had thought they were doing to proper size when in fact they had used millimeters instead of feet. They also made the mistake of assuming all section lines were all norht south east west
