Renaming a variable involves changing the name of a variable in a program or code to improve clarity or reflect its purpose better. This process is essential in programming, as clear variable names help developers understand the code more easily and maintain it over time. In many programming languages, such as Python or Java, renaming a variable can be done simply by updating its declaration and all instances where it is used. Integrated Development Environments (IDEs) often provide tools to automate this process, ensuring that all references to the variable are updated consistently throughout the code.