A contingency table is a statistical tool used to display the relationship between two categorical variables. It organizes data into rows and columns, where each cell shows the frequency or count of occurrences for specific combinations of the variables. This helps in visualizing how different categories interact with each other. For example, a contingency table might show the relationship between gender and preference for a product. By analyzing the table, researchers can identify patterns, trends, or associations, making it easier to draw conclusions about the data and inform decision-making processes.