Caching stores a copy of a requested resource locally so that future requests can be served from the local copy rather than refetching from the remote server. This improves performance by reducing bandwidth usage and server load. Caches can be both public and shared, or private. The cache behavior is controlled by response headers like Cache-Control, Expires, and ETag, and request headers like If-Modified-Since that allow conditional requests only if the resource has changed. Caching is useful for static resources but not dynamic data that changes frequently. Cache-busting forces clients to discard cached copies and retrieve the latest version.