Mohr's Circle is a graphical representation used in engineering and materials science to analyze stress and strain in two-dimensional systems. It helps visualize the relationship between normal and shear stresses acting on different planes within a material, allowing engineers to determine maximum and minimum stresses. The circle is constructed using the principal stresses, which are the maximum and minimum normal stresses. By plotting these stresses on a coordinate system, Mohr's Circle provides a clear way to find the orientation of the principal planes and the corresponding shear stresses, aiding in the design and analysis of structures.