Netlify Identity is a full suite of authentication functionality that allows users to manage and authenticate themselves on your site or app without requiring them to be users of Netlify or other services. To get started, you can enable it on your site's dashboard and add the Netlify Identity Widget, which can be built from scratch or used as a pre-built widget available through npm/yarn installation. Storing user state in the app is crucial for basic login and logout functionality, which can be achieved using local storage or global stores like Redux or MobX. The feature also allows users to log into your site using external service providers like Google, GitHub, Bitbucket, and GitLab. Additionally, you can customize the registration process by allowing users to sign up without verifying their email address or disabling new user registration altogether.