Normalization: Split data into multiple tables to eliminate redundancy. Update in one place.
Denormalization: Duplicate data to avoid joins. Faster reads, harder updates.
Normalized: user_name stored only in users table. Order queries JOIN to get the name.
Denormalized: user_name copied into orders table. No join needed.
Start normalized. Denormalize when you identify slow queries that need it. Read-heavy systems often denormalize. Write-heavy systems stay normalized.
In interviews, discuss this trade-off explicitly.