Pointers, also known as indicators, are variables that store the memory address of another variable. They allow programmers to directly access and manipulate data in memory, making them essential for efficient memory management and dynamic data structures like linked lists and trees. By using pointers, developers can create more flexible and powerful programs. In languages like C and C++, pointers are commonly used to pass large data structures to functions without copying them, which saves time and resources. Understanding pointers is crucial for tasks such as memory allocation, deallocation, and implementing complex algorithms that require direct memory access.