Total harmonic distortion (THD) is a measurement used to quantify the distortion present in a signal due to the presence of harmonics, which are integer multiples of the fundamental frequency. THD is critical in assessing the quality of analog-to-digital and digital-to-analog conversion processes, as it indicates how much the output signal deviates from the ideal representation of the original input. High THD values can lead to poor signal quality, affecting audio and communication systems, making it essential to minimize distortion during conversions.