The Factory Method Pattern allows subclasses to determine which object to create by overriding a factory method, providing flexibility in object creation. It defines an interface for creating objects but lets subclasses decide which class to instantiate. This pattern is useful when the class that creates the object is different than the class that knows which object is required or when subclasses need to specify the objects that will be created. The document provides an example of applying the Factory Method Pattern to a banking account management system to create different account objects based on configuration parameters while avoiding violations of the Open/Closed Principle.