Caramelization is the browning that happens when sugars alone are heated to high temperatures, breaking down into new compounds (aldehydes, ketones, furans) that create a rich, complex flavor and a golden-brown to deep amber color.
It is distinct from the Maillard reaction, which produces browning through a reaction between sugars and proteins (as in seared meats or bread crust) rather than sugar alone; the two often occur together in cooking but are chemically different processes. The word "caramel" is generally traced to the Latin cannamellis, "sugar-cane honey."
Caramelization occurs in searing, roasting, and baking, producing the golden crust on breads and pastries, and it brings out the natural sweetness of roasted vegetables and caramelized onions. Overcooking past the desired point turns the flavor bitter and burnt.