Monosaccharides are the simplest form of carbohydrates and are made up of a single sugar molecule. They serve as building blocks for disaccharides like sucrose and polysaccharides. Disaccharides consist of two monosaccharides bonded together, while polysaccharides are long chains of many monosaccharides bonded together. Benedict's test can be used to identify the presence of simple sugars like monosaccharides and disaccharides by observing the color change when heated in the Benedict's reagent solution.