The Chomsky Hierarchy is a classification of formal languages based on their generative power. It consists of four levels: Type 0 (recursively enumerable languages), Type 1 (context-sensitive languages), Type 2 (context-free languages), and Type 3 (regular languages). Each type has specific rules and limitations, with Type 0 being the most powerful and Type 3 the least. These language types are used in various fields, including computer science, linguistics, and automata theory. The hierarchy helps in understanding the complexity of different languages and the computational resources needed to process them, guiding the design of programming languages and compilers.