Dropout is a regularization technique used in neural networks to reduce overfitting by randomly omitting certain neurons during the training phase, thus preventing complex co-adaptations on training data. This method acts like an ensemble approach, training various neural network architectures simultaneously by ensuring that other neurons make predictions for the absent ones, which results in a network less sensitive to specific weights. Implemented using Tensorflow Keras, the technique is computationally efficient and can be applied to both input and hidden layers, with optimal dropout rates typically set around 0.5 for hidden layers and 0.2 for input layers. Although dropout reduces overfitting, achieving an ideal balance in model performance requires fine-tuning, such as setting constraints on the maximum norm of weights, and can be further explored by adjusting parameters to improve validation data accuracy.