VTP (VLAN Trunking Protocol) is a Cisco proprietary protocol that helps in managing VLANs across a network infrastructure. It allows for easy configuration and propagation of VLAN information to other switches in the network, saving time and eliminating the need for manual configuration on each switch. VTP is important in Cisco networking because it simplifies VLAN management, improves network scalability, and reduces the chances of misconfigurations.