Software testing is a process used to identify issues and ensure quality in developed software. It involves techniques like unit testing of individual code components, integration testing of interface between components, and system testing of the full application. While exhaustive testing of all possible inputs is not feasible due to time constraints, techniques like equivalence partitioning, boundary value analysis, and error guessing help prioritize test cases. The goal is to thoroughly test the most important and error-prone areas with the time available.