An algorithm is a well-defined computational procedure that takes input values and produces output values. It has several key properties including being well-defined, producing the correct output for any possible input, and terminating after a finite number of steps. When analyzing algorithms, asymptotic complexity is important as it measures how processing requirements grow with increasing input size. Common complexity classes include constant O(1), logarithmic O(log n), linear O(n), quadratic O(n^2), and exponential O(2^n) time. For large inputs, slower asymptotic growth indicates better performance.