Indexing is a crucial concept in databases, particularly significant during interviews for positions that involve database management. The discussion begins with the importance of understanding the architecture of computing devices, specifically focusing on the roles of the CPU, RAM, and secondary memory. When a query is processed, such as retrieving details from a student table based on a roll number, the CPU handles the processing. However, the data is stored on a hard disk for permanent retention, whereas RAM is volatile and loses data when the system is shut down. This discrepancy in speed between the CPU, which operates in millions of instructions per second, and the hard disk, which operates at a significantly slower rate, necessitates the use of indexing. Indexing aids in optimizing the retrieval of data from slower storage systems, improving the efficiency of queries. The video transitions into the mechanisms of how indexing functions within this framework, preparing for an in-depth analysis of specific indexing techniques and their advantages in database operations.