Exceptions are runtime errors or unexpected events that disrupt the normal flow of a program. They can occur due to various reasons, such as invalid user input, file not found, or division by zero. Exception handling is a mechanism used to manage these errors gracefully, ensuring the program doesn't crash and can recover or provide meaningful feedback. This is achieved using constructs like try, catch (or except), and finally. The try block contains code that might throw an exception, the catch block handles the exception, and the finally block executes cleanup code regardless of the outcome. Effective exception handling improves a program's robustness and user experience.