The UnknownHostException in Java is a checked exception that signifies the inability to determine the IP address of a host, often caused by typographical errors in the hostname or DNS misconfigurations. It requires handling through a try-catch block in code to manage potential issues when connecting to remote hosts using hostnames. An illustrative example demonstrates how a typo in a hostname can trigger this exception, and the text suggests surrounding such susceptible code with try-catch blocks to handle the exception effectively, including a finally block to close connections and prevent resource leaks. To avoid UnknownHostException, ensuring the hostname's accuracy and verifying DNS settings are recommended. Additionally, tools like Rollbar are highlighted for their ability to automate error monitoring and management, thus facilitating a smoother deployment process by offering real-time error tracking and triaging.