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Agile is an umbrella term for different ways of developing software that react against the traditional waterfall model. The waterfall model involves detailed planning followed by production, similar to building tangible products like cars. Agile proponents believe software is much more complex and dynamic than tangible products, requiring a more flexible and iterative approach to development. Software is described as the most complex product ever created, constantly interacting with itself and other components. This highlights the need for a more adaptive and collaborative development process in software development.