Terraform is an infrastructure as code tool that allows infrastructure to be provisioned and managed declaratively through code. It aims to streamline operations by automating infrastructure provisioning and management, reducing manual efforts and errors. The document discusses how Terraform works, including defining infrastructure through configuration files, connecting to providers to provision resources, and best practices for using Terraform like version control and remote state management. A demo is also provided to illustrate provisioning an EC2 instance with Terraform.