An applet is a small Java program that runs in a web browser. The document discusses the applet lifecycle, which involves initialization, running, idle, and destruction states. It also covers key applet classes like Applet and Graphics, and methods like init(), start(), stop(), paint(), and destroy() that control an applet's execution. The document provides examples of creating a simple "Hello World" applet using Java code, HTML tags, and testing the applet in a browser.