Indexes are crucial for optimizing database performance. They act like a table of contents for a book, allowing the database to quickly find the data it needs without having to scan the entire table. This is particularly important for large tables where searching through every row would be extremely slow. When you create an index, the database stores the values of the indexed columns in a sorted structure, enabling efficient searching. This sorted structure allows the database to quickly locate rows matching a specific value. Indexes are not stored in the same way as the table data, but rather as a separate data structure. This means that creating an index does not increase the size of the table itself, but it does add overhead in terms of storage space for the index itself and potentially in terms of update time, as the index needs to be updated when the table data changes.