1) Induction is the author's favorite proof technique. It involves assuming a statement is true for a base case, and then using that to show the statement is true for all following cases.
2) The basic steps of a proof by induction are: state the problem, state the plan, prove the base case, state the inductive hypothesis, prove the next case, and state what was proved.
3) The example proves that the sum of the first n natural numbers equals n(n+1)/2 by mathematical induction. It shows the base case is true, assumes the inductive hypothesis, and proves the next case to complete the proof.