In-Group/Out-Group Theory explains how people categorize themselves and others into groups. The "in-group" consists of individuals who share similar characteristics, beliefs, or interests, fostering a sense of belonging and loyalty. Conversely, the "out-group" includes those who do not share these traits, often leading to feelings of competition or hostility. This theory highlights the psychological tendency to favor in-group members while viewing out-group members with suspicion or bias. Such dynamics can influence social interactions, group behavior, and even conflict, as seen in various contexts like politics, sports, and cultural identity.