GeoDjango allows you to work with geographic data seamlessly in Django. It adds spatial lookups to the Django ORM so you can query geographic objects by distance and location. Setting up GeoDjango involves installing PostGIS and GEOS libraries, creating a spatial database, configuring Django settings to use the PostGIS database engine, and registering geographic models with GeoManager. The admin site can also be customized to display maps using templates that include Google Maps JavaScript API.