The Factory Method pattern defines an interface for creating objects but lets subclasses decide which class to instantiate. It provides a way to delegate object instantiation to subclasses. For example, a hotel front desk acts as a factory by creating the appropriate type of room object based on a customer's needs. The pattern involves a Creator class with a factory method that returns a Product object, while ConcreteCreator subclasses override the method to instantiate a ConcreteProduct. This decouples client code from the instantiation process and makes a system extensible to new product types.