Number systems are used to represent information quantitatively and include binary, decimal, octal, and hexadecimal. Binary uses only two digits, 0 and 1, while decimal uses 10 digits, octal uses eight digits from 0 to 7, and hexadecimal uses 16 digits from 0 to 9 and A to F. Converting between number systems allows for efficient representation of large binary numbers and universal representation of quantities outside digital systems using decimal.