Function point analysis is a method of estimating the size of a software application based on the user view rather than lines of code. It involves identifying and classifying functional components such as internal logical files, external interface files, inputs, outputs, and inquiries. Each component is assigned a complexity and weight to calculate the total functional size in function points. The size can then be adjusted based on 14 general system characteristics to determine the final adjusted size. The document provides details on the history, vocabulary, types of data and transactions, counting process, and complexity determination involved in function point analysis.