Network Address Translation (NAT) is a method used in computer networking to modify the IP address information in packet headers while they are in transit across a router or firewall. This allows multiple devices on a local network to share a single public IP address when accessing the internet, enhancing security and conserving the limited number of available IP addresses. NAT works by translating the private IP addresses of devices within a local network to a public IP address. When data is sent from a device, NAT changes the source address to the public IP, and when responses come back, it translates the address back to the original private IP, ensuring proper communication.