Encapsulation is a core principle of object-oriented programming that involves binding together data and functions that manipulate the data, and restricting access to these from outside the encapsulating structure. This lecture discusses how encapsulation addresses issues like global scope by allowing data access through class-defined interfaces. It also explains how encapsulation supports information hiding through private and public visibility modifiers, and how this improves code maintainability and limits the impact of changes. Well-designed classes employ encapsulation by making all attributes private and only exposing relevant interface methods as public.