Large deviations refer to the study of the probabilities of rare events that deviate significantly from the expected outcome in a stochastic process. This concept is important in fields like probability theory and statistical mechanics, where understanding the likelihood of extreme outcomes can inform decision-making and risk assessment. In practical terms, large deviations help quantify how often unusual events occur, such as a stock market crash or a natural disaster. By analyzing these rare occurrences, researchers can develop models that predict their likelihood and impact, aiding in areas like finance and insurance.