How does a turbocharger work and what are its benefits?

A turbocharger uses exhaust gas energy to spin a turbine connected to a compressor, which forces more air into the engine cylinders. More air allows more fuel to be burned, increasing power output from a smaller engine. Benefits include higher power density, improved efficiency at altitude, and downsizing capability (smaller engine with turbocharged performance). The main challenge is turbo lag - the delay before boost pressure builds up.