Explain exception handling in Java and best practices.

Exceptions represent runtime errors. Hierarchy: Throwable -> Error (unrecoverable), Exception -> RuntimeException (unchecked), other checked exceptions. Try-catch-finally: catch handles exception, finally always executes (cleanup). Multi-catch: catch (IOException | SQLException e). Try-with-resources: automatically closes AutoCloseable resources. Best practices: catch specific exceptions, don't catch Throwable/Error, don't swallow exceptions silently, throw early catch late, use custom exceptions for domain errors. Checked vs unchecked: checked for recoverable conditions, unchecked for programming errors.