RxJava is a Java implementation of reactive programming, modeled after the Reactive Extensions (Rx) and designed to simplify thread management and avoid callback complexities. It features various types of observables (like Flowable, Observable, Single, Maybe, and Completable) that facilitate efficient event handling and backpressure management. The document provides an overview of the observer design pattern, benefits of using RxJava, and examples of observable usage and testing.