A hypothesis is an assumption or proposed explanation made on limited information to guide further investigation. It provides the basis for investigation by establishing the direction of inquiry. A good hypothesis is specific, testable, and related to existing theory. There are two main types - crude hypotheses indicate what data to collect, while refined hypotheses state empirical relationships. Hypotheses come in descriptive, explanatory, null, and alternative forms and serve important functions such as explaining facts, directing inquiry, and enabling deductions.