A packet sniffer, also known as a network monitor or network analyzer, is software that can capture and analyze all network traffic passing through a computer network interface. It works by operating a network interface in promiscuous mode to capture all traffic, including packets not intended for that interface. Packet sniffers are useful for network administrators to identify issues like wrong packets, delays, and rogue sniffers, but they can only capture traffic within their local subnet unless placed on a computer inside the target network.