Databases are structured collections of information that facilitate the efficient storage, management, and retrieval of data. They serve as an abstraction over traditional file systems, allowing developers to create applications that can easily create, read, update, and delete persistent data. Databases can be categorized into relational and non-relational types, with relational databases organizing data into tables that are interconnected through foreign keys. This structure ensures data integrity and supports complex queries using Structured Query Language (SQL). Overall, databases are essential for modern software applications, providing a reliable framework for data handling and manipulation.