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In Illustrator, creating and modifying symbols is essential. To create a symbol, open the Symbols panel under Window and define the object as a symbol. You can then modify it by making transformations, adding effects like drop shadows, or making copies. There are multiple ways to define an object as a symbol, such as using the new symbol icon, options menu, or pressing F8. Ensure the type is set to Movie Clip when creating a symbol. Once defined, the symbol becomes an instance that can be manipulated using the bounding box. The Symbols panel serves as a database for all symbols created.