OAuth 2.0 is an authorization framework that enables applications to obtain limited access to user accounts on HTTP services like Facebook and GitHub. It works by delegating user authentication to the service hosting the user account and authorizing third-party applications to access the user account with the user's permission. The document then provides steps for implementing OAuth 2.0 authorization in a Grails application, including adding plugins, generating domain classes, configuring authorization rules and scopes, and performing the authorization code grant flow.