What is a firewall and how does it work?

A firewall monitors and controls network traffic based on security rules. Types: Packet filtering (examines headers, source/destination IP and port), Stateful inspection (tracks connection state), Application layer (inspects content, deep packet inspection), Next-gen (adds intrusion prevention, malware detection). Can be hardware or software, network or host-based. Rules typically specify allow/deny based on IP, port, protocol. Defense-in-depth uses multiple firewall layers.