Classless Inter-Domain Routing (CIDR) is a method used to allocate and manage IP addresses more efficiently than the older class-based system. It allows for variable-length subnet masking, which means that networks can be divided into smaller or larger segments based on actual needs rather than fixed sizes. This flexibility helps reduce the wastage of IP addresses. CIDR notation represents IP addresses and their associated routing prefix, such as 192.168.1.0/24. The number after the slash indicates how many bits are used for the network part of the address. This system improves routing efficiency and helps manage the growing number of devices connected to the internet.