Anomaly detection uses Gaussian distributions to identify outliers in data. A univarate Gaussian model uses the mean (μ) and standard deviation (σ) to detect anomalies in individual features, while a multivariate Gaussian model considers correlations between multiple features to better identify outliers. Developing anomaly detection algorithms requires addressing issues like data labeling, validation, evaluation, and parameter selection. Supervised learning is preferred when labeled data is available, while anomaly detection is suitable for unlabeled data to find previously unknown outliers.