Clustering is an unsupervised learning technique that organizes data into groups with high intra-class similarity and low inter-class similarity, with distance measures defining the dissimilarity between objects. There are two primary types of clustering: hierarchical and partitional, with algorithms like k-means and BIRCH addressing different aspects of clustering. Key considerations for clustering algorithms include scalability, noise handling, and the ability to determine the number of clusters, which remains an unsolved problem in many cases.