Packages in Java are used to organize classes and provide namespace management to avoid naming conflicts. A package groups related types like classes, interfaces, enums and annotations. Programmers can define their own packages to organize related classes. Packages create a new namespace to avoid conflicts and make classes easier to locate and access. The package name is specified in a source file using the package keyword and files for a package must be stored in a subdirectory matching the package name. Classes in other packages can be accessed using their fully qualified names or by importing the package.