How does Python's exception handling work, and what are the key concepts involved?

Python's exception handling is based on the concept of 'try...except' blocks. The `try` block contains the code that might raise an exception. If an exception occurs within the `try` block, the `except` block is executed. The `except` block specifies the type of exception to handle, and the `raise` statement can be used to re-raise the exception if needed.