Nmap is an open source tool that scans networks to identify devices, services, and operating systems. It works by crafting custom IP packets with different flags using raw sockets to elicit responses that provide information not otherwise available. Nmap can perform various types of scans, identify hosts and services, detect firewalls and IDS, and determine operating systems through detailed analysis of responses. It provides flexible output options and techniques for advanced scanning, packet alteration, and timing control.