A Javascript ReferenceError occurs when a variable is referenced before it is declared, often seen with event handlers if the event parameter is not properly defined. This specific error, "ReferenceError: event is not defined," typically arises in browsers that do not support the deprecated Window.event property, resulting in issues when the event parameter is omitted or incorrectly named in JavaScript functions. To prevent this error, it is recommended to declare the event parameter explicitly in event handlers, thus allowing the Event object to be used correctly. Tools like Rollbar can assist in managing and analyzing such errors in real time, providing developers with the confidence to handle and fix JavaScript errors effectively.