A process is a program in execution that requires resources like CPU, memory, and I/O to accomplish its tasks. A thread is a specific function within a process. A process can consist of multiple threads to perform different tasks concurrently. The operating system is responsible for process management activities like creation, termination, scheduling, and synchronization of processes and threads. It uses data structures like the Process Control Block to store process information and queues to manage processes in different states like ready, running, blocked.