Multithreading is a concurrent execution technique that allows multiple threads to run independently but share the same resources, improving performance, especially in applications that require multitasking. A thread is the smallest unit of a CPU's execution, and Java provides built-in support for multithreading through the Thread class and the Runnable interface. Threads in Java can be created by extending the Thread class or implementing the Runnable interface, and they run in parallel, allowing programs to perform several tasks at the same time. This enhances the responsiveness and efficiency of applications, such as servers, games, and real-time processing systems, by enabling better utilization of system resources. Java also provides mechanisms like synchronization to manage shared resources and prevent issues like race conditions.