Capitalization is the act of writing a word with its first letter in uppercase and the rest of the letters in lowercase. Proper nouns, titles, first words in sentences, the pronoun 'I', adjectives derived from proper nouns, abbreviations, and acronyms should be capitalized. Exceptions to capitalization include words like 'and', 'the', and 'a'. Common capitalization errors include capitalizing words that should not be capitalized and not capitalizing words that should be capitalized.