The CAP Theorem, proposed by computer scientist Eric Brewer, states that in a distributed system, it is impossible to simultaneously achieve all three of the following guarantees: Consistency, Availability, and Partition Tolerance. Distributed systems must trade-off between these three factors. For example, in the face of a network partition (communication breakdown), a system must choose between remaining available (continuing to respond to requests) or ensuring consistency (all nodes have the same data). This theorem guides the design and decision-making in distributed system architectures.