Lambda Calculus is a formal system in mathematical logic and computer science used to express computation through function abstraction and application. It uses variable binding and substitution to define functions and their evaluations, allowing for the manipulation of symbols in a structured way. Developed by Alonzo Church in the 1930s, Lambda Calculus serves as a foundation for functional programming languages and helps in understanding the principles of computation. It provides a framework for defining and applying functions, making it a crucial concept in theoretical computer science and the study of algorithms.