NFC is a short-range wireless technology that allows data transfer between devices in close proximity. It uses magnetic field induction and works similarly to RFID technology, requiring one device to have an NFC reader/writer and the other to have an NFC tag. NFC allows communication between multiple devices within a small area using the same frequency. It has applications in social networking, payments, and electronic identity documents. While NFC provides advantages over other wireless technologies in some use cases, it also has some disadvantages like a lower data transfer rate and lack of security compared to technologies like Bluetooth.