The Python KeyError occurs when attempting to access a non-existent key in a dictionary, akin to using an incorrect code to open a locker. This error is raised when a mapping key is not found within a dictionary's existing keys. An example involves a dictionary named "employees" where trying to access a key that doesn't exist, such as "four," results in a KeyError. To prevent this error, one can check if a key exists using the "in" keyword or use the .get() method to safely retrieve values, which returns None if the key is absent. Additionally, tools like Rollbar can help manage and track such errors in real-time, offering a more confident approach to deploying production code by automating error monitoring and triaging.