Caching improves computer and application performance by storing frequently accessed data in faster, but smaller, storage such as RAM or CPU cache layers.

The method relies on principles like temporal locality (recent data is more likely to be reused) and spatial locality (data near recently accessed items is likely to be needed soon). Effective caching trades off between speed, cost, and storage capacity, with various strategies like prefetching related data and using multiple cache layers to optimize performance across local computers and distributed cloud environments.