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This video tutorial demonstrates how to find and replace text in a file using the terminal. The speaker shows an example file named "Steven" with text that needs to be replaced. By executing a command with the syntax "s/old_text/new_text/g" followed by the file name, all occurrences of the old text are replaced with the new text. This process is illustrated with an example of replacing "Ill snooze" with "London" in the "Steven" file. The command successfully replaces the text, exemplifying how to use the terminal in this manner.