Dialog boxes are windows that allow users to interact with and provide information to applications. There are two types: common dialog boxes that are predefined system windows, and custom dialog boxes that are user-defined. Dialog boxes consist of elements like title bars, instruction text, controls to select information, and action buttons. They are non-resizable modal windows with standard buttons and icons that block interaction with other application windows until closed. Developers can create custom dialog boxes from forms by configuring properties and buttons when system dialog boxes do not meet needs.