Standard deviation is a measure of how dispersed data values are from the mean. It is calculated as the square root of the variance, which is the average of the squared differences from the mean. A lower standard deviation means values are closer to the mean, while a higher standard deviation means values are more spread out from the mean. The document provides steps to calculate standard deviation for both grouped and ungrouped data, as well as formulas for finding the standard deviation of a sample or entire population.