Garbage collection in Python is an automatic memory management process that helps developers manage memory allocation and deallocation without manual intervention. It identifies and removes objects that are no longer in use, thereby preventing memory leaks and optimizing memory usage. Python primarily employs reference counting, where each object maintains a count of references pointing to it. When this count drops to zero, the object is eligible for garbage collection. Additionally, Python handles cyclic references through a generational garbage collection system, ensuring efficient memory management and improved performance in applications. Understanding this process is crucial for effective Python programming.