Amniocentesis is a prenatal diagnostic procedure that involves extracting a small amount of amniotic fluid to detect fetal conditions such as chromosomal defects, genetic disorders, and gender, though sex determination is prohibited in India. Indications for the procedure include assessing fetal health, detecting diseases like Down syndrome, and managing complications such as polyhydramnios, but it also carries risks including miscarriage and infection. Proper preparation, including ensuring the mother's bladder is empty, and post-procedure care are crucial for minimizing risks.