Hierarchical data is a way of organizing information in a tree-like structure, where each item is connected to a parent item. This structure allows for clear relationships between different levels of data, making it easier to understand how items are related. For example, in a company, the CEO is at the top, followed by managers, and then employees under each manager. In hierarchical data, each level can have multiple child items but only one parent item. This organization is commonly used in various fields, such as file systems, where folders can contain subfolders and files, creating a clear path to access information.