Sancho Panza is a fictional character in Miguel de Cervantes' novel 'Don Quixote', serving as the loyal squire to the protagonist, Don Quixote. He represents the practical, down-to-earth perspective that contrasts with Don Quixote's idealism and chivalric fantasies. Throughout the story, Sancho's witty remarks and comic relief provide balance to the narrative, highlighting themes of realism versus illusion.