CIDR stands for Classless Inter-Domain Routing, which is a method of assigning IP addresses that improves the efficiency of address distribution and replaces the previous system based on Class A, Class B, and Class C networks. CIDR allows network engineers to divide an IP address space into a hierarchy of subnets of different sizes, which makes it possible to create subnetworks with different host counts without wasting large numbers of addresses.

CIDR notation is a compact representation of an IP address and its associated network mask. It is simply a count of the number of network bits (bits that are set to 1) in the subnet mask. For example, the CIDR notation 10.0.0.0/30 means that the network ID is 10.0.0.0, the subnet mask is 255.255.255.252, and the subnet has two host addresses (10.0.0.1 and 10.0.0.2) and one broadcast address 10.0.0.3.

CIDR provides flexibility when determining the network and host identifier assignments on an IP address, which can reduce IP address wastage. It also reduces routing table entries and simplifies data packet routing, allowing routers to organize IP addresses into multiple subnets more efficiently. CIDR is now the routing system on the internets backbone network, and every ISP uses it.