Entity Relationship Diagrams (ERDs) are essential tools in database design, providing a visual representation of the entities within a system and their interrelationships. They help illustrate how data is organized, making it easier for developers and stakeholders to understand the structure of a database. ERDs typically include entities, attributes, and relationships, along with cardinality, which defines how many instances of one entity relate to another. By using ERDs, teams can optimize database architecture, foresee potential issues, and enhance communication among programmers, ultimately leading to more efficient database management and development processes.