Deferred Static Generation (DSG) is a notable feature in Gatsby 4, particularly beneficial for large sites as it allows for the deferral of static page builds until they are requested at run-time, effectively optimizing build time for sites with multiple pages. This method prioritizes the immediate build of frequently visited pages while deferring less accessed ones until they are needed, such as older blog posts or less popular product pages, which can be especially advantageous for content-heavy sites like blogs and ecommerce platforms. Enabling DSG in a Gatsby project involves modifying the `gatsby-node.js` file to pass `defer: true` to the `CreatePage` function for specific pages, and it can be tested and deployed locally or on Gatsby Cloud. This approach offers flexibility and efficiency, enhancing user experience by minimizing initial build times and allowing for dynamic page generation when necessary.