The Median Cut algorithm is a method used in image processing and color quantization. It works by dividing a color space into smaller regions based on the distribution of colors. The process starts by finding the median color in the dataset and then splitting the color space into two halves. This is repeated for each resulting region until the desired number of color clusters is achieved. This technique is particularly useful for reducing the number of colors in an image while preserving its overall appearance. By focusing on the most representative colors, Median Cut helps in applications like image compression and rendering, making it easier to manage and display images efficiently.