Caching in Snowflake refers to the automatic storage of recently accessed data and query results to improve performance for subsequent queries. Snowflake employs several types of caching, including result set caching, where the results of queries are stored temporarily; warehouse data caching, where data processed by a virtual warehouse is cached; and metadata caching, where information about the data structure is stored. These caching mechanisms can significantly speed up query execution by avoiding the need to repeatedly read from disk or compute the same results for common queries, thus enhancing overall efficiency and reducing costs.