TELNET is a standard TCP/IP protocol that allows a user to access resources on a remote host from their local computer. It works by having a TELNET client program establish a TCP connection to a TELNET server on the destination system, allowing the client to send keystrokes and receive output character-by-character. While it was commonly used to administer network devices, TELNET has disadvantages like lack of graphics, security issues, and mouse support. However, it remains useful for configuring some network devices, participating in online communities that value its retro interface, and recreational uses.