Dynamic programming is an algorithmic technique for solving problems by breaking them down into simpler subproblems. It involves viewing a problem as a sequence of decisions, setting up recurrence relations to calculate optimal solutions, and using these relations to iteratively solve for the overall optimal solution. For problems like the 0/1 knapsack problem, dynamic programming avoids recomputing solutions by storing results in a table. Finding optimal orders for matrix multiplication chains and applying dynamic programming to 3D image registration are examples discussed.