Active Directory is a hierarchical database that stores information about network resources like users, computers, printers, and security policies. It operates on a domain model where each domain contains objects representing resources, and domain controllers act as servers that request and provide authentication and authorization services. Each domain also has a unique name and security identifier, and the domains can be organized into trees known as forests for more efficient management. Active Directory also uses Lightweight Directory Access Protocol (LDAP) for communication between the domain controllers and other directory services.