One route instead of many
A router that reaches 10.1.0.0/24, 10.1.1.0/24, 10.1.2.0/24, and 10.1.3.0/24 through the same next hop does not need to advertise four routes. It can advertise one summary, 10.1.0.0/22, that covers all four. Every neighbor then carries a single entry instead of four. Route summarization is this practice applied at the boundaries of a network: aggregate what you know into the shortest prefix that still describes it accurately.
The benefit compounds. Fewer routes means less memory in every device downstream, smaller and faster updates, and, most importantly, stability. If one of the four component networks goes down, the summary does not change, so the failure is not propagated to the rest of the network.
The prerequisite: contiguous and aligned
Summarization is only clean when the underlying prefixes were allocated as a contiguous, aligned block. The four /24s above summarize neatly because together they are exactly 10.1.0.0/22. Had the same four networks been scattered as 10.1.0.0/24, 10.1.5.0/24, 10.3.0.0/24, and 10.7.0.0/24, no short prefix would describe just them, and any summary you advertised would also claim address space you do not route.
This is why address planning matters before the first device is configured. Allocating sites and departments from aligned blocks, the same discipline VLSM enforces inside a single block, is what makes summarization possible later. Summarization is the payoff for supernetting-friendly allocation.
Where it happens
Summarization lives at boundaries. In OSPF it is configured on area border routers and AS boundary routers, since within an area the full link-state topology is flooded and cannot be summarized. EIGRP can summarize on almost any interface. In BGP, aggregation combines specific prefixes into a covering route before advertising them to other autonomous systems, which is a large part of why the global routing table is far smaller than the number of allocated networks.
The black-hole trap
Summarizing a range you do not fully control is dangerous. If you advertise 10.0.0.0/16 but only actually route 10.0.1.0/24, traffic for every other address in that /16 is drawn toward you and then dropped, because you have told the network you can reach addresses you cannot. The reverse failure also exists: a summary that is too narrow leaves some of your real networks unreachable.
Audit a summary before you advertise it. Confirm that the prefixes you own are contiguous, that they align to the summary boundary, and that the summary does not reach beyond them. The CIDR calculator helps with both halves: aggregate a prefix list in Supernet mode, and expose overlaps or unfilled gaps in Overlap / gap mode.