Terraform Workspaces enable the management of multiple deployments of the same configuration. They allow isolation of independent deployments while using the same state file. The workspace command is used to list, show, create, and delete workspaces. When a new workspace is created, a corresponding new state file is maintained in the remote backend. Workspaces can be used for testing modifications to existing configurations before applying them to critical environments or managing resources differently across various environments. However, they should not be confused with Git branches, as both have different purposes. Terraform workspaces are best suited for temporary use and may not be ideal for managing multiple staging environments.