Atomic Design is a methodology for creating design systems that emphasizes a hierarchical approach. It breaks down user interfaces into five distinct levels: Atoms, Molecules, Organisms, Templates, and Pages. Atoms are the smallest elements, like buttons or input fields, while molecules are combinations of atoms that form functional components. This structured approach helps designers and developers build consistent and reusable components. By organizing elements from simple to complex, Atomic Design promotes efficiency and scalability in design, making it easier to maintain and update user interfaces across different projects.