Fuzzy set theory is an extension of classical set theory that allows for partial membership in a set rather than crisp boundaries. In fuzzy set theory, elements have degrees of membership in a set represented by a membership function between 0 and 1. This allows for modeling of imprecise concepts like "young" where the boundary is ambiguous. Fuzzy set theory is useful for modeling human reasoning and systems that can handle unreliable or incomplete information. Key concepts include fuzzy rules in an if-then format and fuzzy inference using methods like Mamdani inference involving fuzzification, rule evaluation, aggregation, and defuzzification.