Gibbs paradox in the context of statistical mechanics addresses the issue of additivity of entropy of mixing gases. The usual discussion attributes the paradoxical situation to classical distinguishability of identical particles and credits quantum theory for enabling indistinguishability of identical particles to solve the problem. We argue that indistinguishability of identical particles is already a feature in classical mechanics and this is clearly brought out when the problem is treated in the language of information and associated entropy. We pinpoint the physical criteria for indistinguishability that is crucial for the treatment of the Gibbs' problem and the consistency of its solution with conventional thermodynamics. Quantum mechanics provides a quantitative criterion, not possible in the classical picture, for the degree of indistinguishability in terms of visibility of quantum interference, or overlap of the states as pointed out by von Neumann, thereby endowing the entropy expression with mathematical continuity and physical reasonableness.