Hypospadias is a birth defect in males where the urethra opens on the underside of the penis rather than at the tip. It occurs in about 1 in 200-300 male births and is caused by incomplete closure of the urethral groove during fetal development. Hypospadias is classified based on the location of the urethral opening - glandular, penile, scrotal, perineal, or anal. Treatment involves surgery to close the urethra opening and straighten the penis, with the procedure varying based on the severity of the case.