A 'variable' is a fundamental and important concept. It is a name assigned to a memory location in a computer, used to store and modify data during the execution of a program. Each variable has a defined data type, such as integer, floating-point number, string, or object, and can hold values corresponding to that data type. Using variables helps create flexible and reusable programs because they allow data to be processed and modified easily based on specific conditions and requirements of the program. Through the declaration, assignment, and use of variables, programmers can perform calculations, manage data, and interact with users or the surrounding environment during the program's execution.