Blood transfusion involves collecting blood from a donor and administering it to a recipient. It is used to treat blood loss from injury or illness, raise hemoglobin levels, and provide antibodies or clotting factors. Blood is typed and cross-matched to avoid incompatible transfusions. Components like red blood cells, plasma, and platelets can be transfused individually. Reactions may occur if the blood is incompatible or improperly stored and can range from mild allergic reactions to life-threatening hemolysis.