Powder metallurgy involves compressing metal powders in a mold and then sintering the compact to bind the particles. It allows for the production of intricate, small metal parts. The process starts with atomization or chemical reduction to produce metal powders which are then blended and compressed in a die. The green compact is sintered at high temperature to increase its strength and density through neck formation between particles. Powder metallurgy is economically viable for high production of parts like cutting tools and turbine blades.