Vagrant is an open source tool that allows users to easily manage and provision virtual development environments. It was created in 2010 to help address issues with local development environments like lack of isolation, lack of shareability, and lack of repeatability. Vagrant uses virtualization technologies like VirtualBox to allow developers to run identical copies of environments regardless of the underlying operating system. It works by defining a configuration file that specifies things like the virtual machine box to use, shared folders, network settings, and provisioning scripts. This allows development teams to have consistent environments that can be easily destroyed and recreated.