The superposition theorem states that in a linear, bilateral network with multiple sources, the response across any circuit element is the sum of individual responses from each source when other sources are replaced by their internal resistance. To apply the theorem, one source is selected, other sources are neutralized, and the circuit is analyzed to find the response; this is repeated for all sources and summed for the overall response. The theorem has limitations, including that it does not apply to non-linear circuits and cannot be used for determining power dissipation.