In the context of Object-Oriented Programming (OOP), an object is an instance of a class that encapsulates both data and functionality. Each object has its own state, defined by its data members (attributes), while adhering to the behaviors outlined by its member functions (methods). For instance, when we declare an object from a class named 'Car,' we generate a unique entity that has its own color and speed, although it follows the blueprint defined by the class. This differentiation between class structure and object instances is key for modular programming, enabling developers to create reusable and manageable code.