Several approaches exist for managing state.
Local state (useState): Default choice. Simple, no setup.
Context: Share state without prop drilling. Good for theme, auth.
External stores (Redux, Zustand):
- Predictable updates via actions
- Dev tools for debugging
- Good for complex state logic
Server state libraries (React Query, SWR):
- Caching, refetching, synchronization
- Handle loading/error states
Interview tip: Don't name specific libraries. Describe the pattern: "I'd use an external store for global state and a server cache library for API data."