The video covers using React's Context API, focusing on the useContext hook. It begins with creating a context using React.createContext for managing a theme, such as toggling between dark and light modes. In the App component, state is set up with useState to handle the theme toggle. A function switches the theme, and this is demonstrated in both function-based and class-based components. The context provider wraps components to provide access to the context values. It also touches on best practices for handling context in applications.