Multisite allows a single WordPress installation to be used to power multiple websites. It provides benefits like shared plugins, themes, and users but also has some drawbacks like all sites being impacted by code changes. Key aspects of multisite include enabling it, choosing a URL structure like subdomains or subdirectories, determining if new sites can be created openly or privately, and managing access through user and network admin roles. The database structure is enhanced with additional tables to support separate content for each site while maintaining shared components across the network.