Web application design involves creating a functional and interactive web app that helps users accomplish specific tasks. It differs from website design as it focuses on user experience (UX) and user interface (UI) design for interactive, functional products. The process includes defining the problem, organizing information architecture, developing a design system, building the app, following best design principles, and testing, launching, and iterating. Some great examples of web application designs include Stripe, Headspace, Uber, Loom, Notion, and Airbnb.