What does the command 'chmod' do in Linux?

The command 'chmod' in Linux is used to change the permissions of a file or directory, which determines who can read, write, or execute it. Permissions are typically defined for three categories of users: the owner of the file, the group associated with the file, and all other users. By using 'chmod,' you can specify different levels of access for each of these categories. For example, you can allow the owner to read and write a file, but only permit others to read it.

The significance of managing file permissions through 'chmod' relates to the security and accessibility of files in a Linux system. This command helps enforce security policies by controlling who can perform various actions on files, thereby protecting sensitive data from unauthorized access.