A Union Type is a data type that allows a variable to hold values of different types. For example, in programming languages like TypeScript or C, a variable defined as a union type can store either a string, a number, or even an object, depending on the context. This flexibility helps developers manage different data types without creating multiple variables. Union types are particularly useful in scenarios where a function can accept multiple types of arguments. By defining a union type, developers can write more versatile and reusable code, enhancing the overall efficiency of their programs while maintaining type safety.