Apache Pig is a platform designed for analyzing large datasets, featuring a high-level language called Pig Latin for expressing data analysis programs, which are optimized for parallel execution via a compiler that generates MapReduce jobs for Hadoop. The architecture includes a parser, optimizer, compiler, and execution engine, enabling users to write and maintain data transformations easily while allowing for optimizations and extensibility. Pig operates in two modes: local mode for small datasets and MapReduce mode for larger datasets within HDFS, with an interactive shell called Grunt for executing commands.