Bit depth refers to the number of bits used to represent each pixel in a digital image. The higher the bit depth, the greater the range of colours or tones that can be displayed, resulting in smoother gradients and more detailed images. For example, an 8-bit image can display 256 tonal values per channel, while a 16-bit image can display 65,536. Bit depth is crucial in digital photography, image editing, and printing, as it directly affects colour fidelity, tonal accuracy, and overall image quality.