TIMER0 is an 8/16-bit timer in PIC18F microcontrollers that can be used to track time. It uses an internal or external clock source, and its frequency can be divided with a prescaler. TIMER0's value is stored in registers and increments in hardware. When it overflows at the maximum value, an interrupt flag is set. Software can check this flag to trigger events at timed intervals without needing to continuously check the timer value. Using overflow mode reduces code complexity compared to clearing the timer value periodically.