Neural networks are powerful models that mimic the human brain, enabling complex tasks without human intervention. They consist of smaller units called perceptrons, which receive input multiplied by weights and pass it through an activation function to produce output. Neural networks have three primary layers: input, hidden, and output, with forward propagation passing data through all layers, loss calculation determining the difference between predicted and actual values, back propagation adjusting weights to minimize loss, and weight update iterating these processes to optimize performance. Various types of neural networks exist, including convolutional neural networks for image recognition, recurrent neural networks for sequential data analysis, and generative adversarial networks for generating new data, each with unique applications in AI-driven technologies.