Veracrypt is encryption software that can encrypt disks, files, partitions, and directories on Linux systems like Ubuntu. To install Veracrypt on Ubuntu, users first add the Unit193 encryption PPA with "sudo add-apt-repository ppa:unit193/encryption", then update with "sudo apt update" and finally install Veracrypt using "sudo apt install veracrypt". This allows encryption of data on the fly for security and privacy on Ubuntu systems.