XML files are a type of text file that uses a structured format to store and transport data. The acronym stands for eXtensible Markup Language, which means it allows users to create their own tags to define the data. This flexibility makes XML files useful for a variety of applications, such as web services and data storage. XML files are designed to be both human-readable and machine-readable. They consist of elements, attributes, and values organized in a hierarchical structure. This organization helps software programs easily parse and manipulate the data, making XML a popular choice for data interchange between different systems and platforms.