Threads allow multiple activities to occur within a single process. Threads are lightweight processes that have their own call stack and can run concurrently with other threads. Threads take advantage of multiprocessor systems, simplify modeling, and allow for asynchronous background processing. The life cycle of a thread includes states such as new, runnable, running, blocked, and terminated. When first created, a thread is new, then becomes runnable when start() is called, running when scheduled, and blocked or terminated when completion criteria are met.