Exceptions are events that disrupt normal program flow, such as invalid user input or file access errors. Errors are problems beyond the programmer's control. Exceptions can be checked, which must be caught, or runtime, which can be ignored. The try block contains exception-prone code, catch handles specific exception types, and finally ensures cleanup. Common exceptions include NullPointerException and ArrayIndexOutOfBoundsException. Exception handling separates error handling from regular code and groups error types for easier management.