Obstacle Driven Development (ODD) is a software development process that addresses issues with other methods like Test Driven Development and Waterfall development. ODD adapts stages from the Waterfall model and integrates testing throughout development. It uses models like the ODD Circle, Triangle, and M-models to demonstrate how stages are linked by tests and how verification and validation are performed at each stage from requirements to production. The goal of ODD is to identify and address failures early through implicit testing between stages.