Clipping is a process used in computer graphics to determine the visible and invisible portions of an image or object when only part of it can be displayed in the viewing area. It works by extracting the desired visible portion and discarding anything outside the viewing area. Some key applications of clipping include identifying visible areas of 3D objects, creating objects using solid modeling, and drawing and manipulation operations. The Cohen-Sutherland algorithm is commonly used for line clipping, where it assigns region codes to line endpoints and finds the intersection points of any partially visible lines to clip them to the visible region.