Underexposure occurs when the camera sensor receives too little light, leading to dark and sometimes detail-less images. This lack of light can cause a loss of shadow detail and color saturation, making the photo appear dull or murky. Underexposed images may lack brightness and clarity, making it challenging to see the subject clearly. It is crucial to adjust settings like shutter speed, aperture, and ISO to ensure proper exposure and capture a well-balanced image.