Kanban is a lean production method derived from Toyota's production system. It utilizes a Kanban board to visualize the workflow and limit work-in-progress through different stages shown as columns. The five key principles of Kanban are to visualize workflow, limit work-in-progress, manage flow, make policies explicit, and improve collaboratively. Kanban employs a pull system where completing an item triggers pulling the next work item and uses work-in-progress limits on columns.