Squatting is the action of occupying an abandoned or unoccupied area of land or a building (usually residential) that the squatter does not own, rent or otherwise have lawful permission to use. The United Nations estimated in 2003 that there were one billion slum residents and squatters globally. Squatting is practiced worldwide, typically when people find empty buildings or land to occupy for housing.

In developing countries and least developed countries, shanty towns often begin as squatted settlements. In African cities such as Lagos, much of the population lives in slums. There are pavement dwellers in India and in Hong Kong as well as rooftop slums. Informal settlements in Latin America are known by names such as villa miseria (Argentina), pueblos jóvenes (Peru) and asentamientos irregulares (Guatemala, Uruguay). In Brazil, there are favelas in the major cities and land-based movements in rural areas.

In industrialized countries, there are often residential squats and also left-wing squatting movements, which can be anarchist, autonomist or socialist in nature, for example in the United States. Oppositional movements from the 1960s and 1970s created freespaces in Denmark, the Netherlands and the self-managed social centres of Italy. Each local situation determines the context: in England and Wales, there were estimated to be 50,000 squatters in the late 1970s; in Athens, Greece, there are refugee squats. In Spain and the US, the 2010s saw many new squats following the 2008 financial crisis.

The practice of squatting historically stems from multiple sources, one of which is the development by illegalist and individualist anarchist groups, such as the Pieds plats, of the concept of déménagement à la cloche de bois ('silent move-outs')—the act of leaving a residence without notifying the landlord and ceasing to pay rent. This practice became an early precursor to squatting.

The majority of squatting is residential in nature. As a phenomenon, it tends to occur when a poor and homeless population makes use of derelict property or land through urban homesteading. According to a 2003 estimate by the United Nations Human Settlements Programme (UN-Habitat), there were about one billion people in squatter settlements and slums. According to housing researcher Kesia Reeve, "squatting is largely absent from policy and academic debate and is rarely conceptualised, as a problem, as a symptom, or as a social or housing movement."

In many of the world's poorer countries, there are extensive slums or shanty towns, typically built on the edges of major cities and consisting almost entirely of self-constructed housing built without the landowner's permission. While these settlements may in time become upgraded, they often start off as squats with minimal basic infrastructure. Thus, there is no legal link to sewerage, electricity or water. Such settlements also exist in industrialized countries, such as for example Cañada Real on the outskirts of Madrid.

Squatting can be related to left-wing movements, such as anarchist, autonomist, or socialist. It can be a means to conserve buildings or a protest action. Squats can be used by local communities as free shops, cafés, venues, pirate radio stations or as multi-purpose self-managed social centres. Adverse possession, sometimes described as squatter's rights, is a method of acquiring title to property through possession for a statutory period under certain conditions. Countries where this principle exists include England and the United States, based on common law.

Anarchist author Colin Ward asserts: "Squatting is the oldest mode of tenure in the world, and we are all descended from squatters. This is as true of the Queen [of the United Kingdom] with her 176,000 acres (710 km²) as it is of the 54 percent of householders in Britain who are owner-occupiers. They are all the ultimate recipients of stolen land, for to regard our planet as a commodity offends every conceivable principle of natural rights." Others have a different view; UK police official Sue Williams, for example, has stated that "Squatting is linked to anti-social behaviour and can cause a great deal of nuisance and distress to local residents. In some cases, there may also be criminal activities involved." The public attitude toward squatting varies, depending on legal aspects, socioeconomic conditions, and the type of housing occupied by squatters. In particular, while squatting of municipal buildings may be treated leniently, squatting of private property can often lead to strongly negative reactions on the part of the general public and the authorities.