Nominal variables are a type of categorical variable that represent distinct categories without any inherent order. They are used to label or classify data into groups, such as gender, color, or type of pet. Each category is unique and does not have a numerical value or ranking associated with it. For example, if you survey people about their favorite fruit, the responses like apple, banana, and orange are nominal variables. These categories can be counted or compared in terms of frequency, but you cannot perform mathematical operations like addition or subtraction on them.