A circular linked list is a type of linked list where the last node points back to the first node, allowing traversal in both directions without a defined start or end. There are two types: circular singly linked lists with one pointer per node for unidirectional traversal, and circular doubly linked lists with two pointers per node for bidirectional traversal. The document outlines algorithms for inserting and deleting nodes at both the beginning and end of these lists, along with their applications in polynomial representation and generalized linked lists.