The Rsync Daemon is a program that allows for efficient file synchronization and transfer between computers over a network. It operates in a client-server model, where the daemon runs on a server and listens for incoming requests from clients. This setup enables users to back up files or mirror directories while minimizing data transfer by only sending changes made to files. Using the Rsync protocol, the daemon can handle multiple connections simultaneously, making it suitable for large-scale data management. It supports various features like compression, encryption, and bandwidth limitation, ensuring secure and efficient file transfers across different systems.