Active Directory is a directory service created by Microsoft that allows the management of users, groups, computers and other network resources. It uses a centralized database that contains information about these objects and authenticates users on the network. Administrators can use Active Directory to control permissions, security settings and other policies for all connected computers from a central location. It provides benefits like single sign-on, centralized management and automation of tasks. Active Directory requires a Windows server and networking infrastructure and planning is important for successful implementation and management of the directory service.