The Nyquist Stability Criterion is a graphical method used to determine the stability of a control system based on its open-loop frequency response. It involves plotting the Nyquist plot, which represents the complex values of the transfer function as a function of frequency, and analyzing how these plots encircle the critical point of (-1, 0) in the complex plane. This criterion connects frequency domain behavior with stability analysis, providing insight into how feedback systems respond to changes in gain and phase.