Digital Image Processing involves representing and processing digital images. A digital image is composed of pixels with finite, discrete intensity values. It can represent grayscale images with one value per pixel or color images with multiple values per pixel. Digital image processing techniques are used in applications like face recognition, license plate reading, and tracking objects. They involve operations on images like filtering, restoration, and extracting attributes. Key components of an image processing system include image acquisition, preprocessing, enhancement/analysis, and output.