OAuth2 is a protocol for authorization that allows clients to access user resources stored on a resource server. It separates the client application from the resource owner credentials. The authorization code flow involves a client redirecting a user to an authorization server, the user authenticating and authorizing access, and the authorization server returning an authorization code to the client which can then request an access token to access protected resources from the resource server on the user's behalf, without exposing the user's credentials directly. This flow allows for single sign-on across microservices and fine-grained authorization of delegated access to resources.