Dharma refers to the moral and ethical duties or responsibilities that an individual must follow in life, which is essential for maintaining harmony in society and the universe. It encompasses righteousness and the proper conduct based on one's role in life, whether as a student, householder, or renunciant. Understanding dharma is crucial for navigating the four purusarthas, as it provides the moral framework that guides one's pursuit of artha (wealth), kama (pleasure), and moksha (liberation).