A cyclic code is a type of block code where the circular shifts of each codeword results in another valid codeword within the code. Cyclic codes have algebraic properties that allow for efficient error detection and correction. They are commonly used in digital networks and storage devices to detect accidental changes to transmitted data by using a checksum or error detecting code. Encoders convert analog signals to digital codes depending on the activated input, while decoders reverse the encoding to obtain the original information.