The operating system controls execution of application programs, acts as an interface between applications and hardware, and provides various services like program development, execution, I/O access, error detection, and accounting. It is responsible for managing computer system resources and functions by executing as a program itself while also relinquishing processor control periodically. The kernel is the core portion of the operating system resident in memory containing frequently used functions. Operating systems have evolved from serial processing without a system to modern designs using processes, virtual memory, multiprocessing, distributed systems, and object-oriented techniques.