Fuzzy logic was introduced in 1965 by Lofti Zadeh based on fuzzy set theory. It allows for intermediate values between 0 and 1, unlike boolean logic which only considers true or false. A fuzzy logic system uses fuzzification to convert crisp inputs to fuzzy values, applies a rule base and inference engine to the fuzzy values, and then uses defuzzification to convert the fuzzy output to a crisp value. Fuzzy logic is useful for approximate reasoning and has applications in areas like control systems, decision making, and pattern recognition.