Centralized planning is an economic system where a single authority, often the government, makes all decisions regarding the production and distribution of goods and services. This approach aims to allocate resources efficiently and achieve specific social or economic goals, such as reducing inequality or promoting industrial growth. In centralized planning, the authority typically creates a detailed plan that outlines what to produce, how much to produce, and the prices of goods. This system contrasts with market economies, where decisions are made by individual consumers and businesses based on supply and demand.