State management refers to the process of handling the state or data of an application, ensuring that it remains consistent and predictable. In software development, especially in frameworks like React or Vue, state management helps track changes in data and updates the user interface accordingly. This is crucial for creating responsive applications that react to user inputs and other events. There are various approaches to state management, including local state, global state, and server state. Tools like Redux and MobX are popular for managing global state, allowing developers to share data across different components efficiently. Effective state management enhances application performance and maintainability.