Memory leaks in JavaScript occur when allocated memory is not properly returned to the free memory pool, leading to performance issues like slow website loading and potential crashes. JavaScript uses a garbage collection algorithm called "Mark and Sweep" to manage memory by marking reachable memory blocks and sweeping away unused ones, though leaks can still occur. Tools like Chrome's task manager and its timeline recording feature help developers identify and manage memory usage by visualizing memory allocation and detecting unusual patterns that indicate leaks. Efficient scripting and good practices are essential for ensuring web pages load quickly and operate smoothly, which will be further explored in subsequent discussions.