Floyd-Steinberg Dithering is a technique used in digital imaging to create the illusion of color depth in images with a limited color palette. It works by distributing the quantization error of a pixel to its neighboring pixels, allowing for smoother gradients and more visually appealing results. This method is particularly useful in reducing banding in images when converting from a high-color depth to a lower one. The algorithm operates by processing each pixel in a specific order and calculating how much of the color information is lost when the pixel is approximated to the nearest available color. The excess error is then spread to adjacent pixels, which helps to maintain the overall appearance of the image. This technique is widely used in applications like image processing and computer graphics.