Test data refers to the information used during software testing to validate that a program functions correctly. It can include various types of data, such as input values, expected outcomes, and user scenarios. Test data helps identify bugs and ensures that the software meets its requirements before being released to users. Creating effective test data is crucial for thorough testing. It should cover a range of scenarios, including normal, boundary, and error conditions. By using diverse test data, developers can simulate real-world situations and improve the reliability of the software, ultimately enhancing user satisfaction and trust in the product.