The episode explains that canonical URLs are a crucial element in search engine optimization (SEO), serving as a directive to search engines about the preferred version of a webpage when identical or very similar content exists across multiple URLs. These canonical tags, placed within a webpage's HTML, consolidate ranking signals, such as backlinks and user engagement, to a single authoritative URL, thereby preventing issues like diluted link equity, wasted crawl budget, and lower search rankings caused by duplicate content. The text details how canonical URLs work, the various reasons they are important for SEO, and provides best practices for their implementation, including identifying duplicates, choosing the correct canonical URL, and avoiding common errors. Ultimately, proper canonicalization enhances website performance, improves user experience, and strengthens overall site architecture.