Pairwise testing is a technique used to test software interactions between input parameters by selecting all possible unique pairs of parameter values. It aims to find bugs caused by interactions between two parameters, which are common, while being more efficient than testing all possible input combinations. Tools can generate pairwise test sets to cover all pairs, while testing far fewer cases than exhaustive testing. However, pairwise testing requires effective partitioning of input values and has limitations when dependencies between more than two parameters exist or inputs are not discrete. It works best when there are many possible input values that can be separated into equivalence classes.