Clipping occurs when the amplitude of an audio signal exceeds the maximum value a circuit or digital system can represent. In analog circuits, extreme clipping creates a square wave — a harsh, buzzing distortion. In digital systems (DAWs, interfaces), clipping hard-limits the waveform at 0 dBFS, creating a similar harsh sound.
Digital clipping is more abrupt and less pleasant than analog clipping. Analog gear (tape, tube circuits) clips gradually and produces harmonic distortion that some engineers find musically useful. Digital clipping at 0 dBFS sounds immediately harsh and is almost always unwanted.
Prevention is the only real solution for digital clipping — it cannot be fixed in post-production. Once the peaks are flattened, the audio information is permanently gone. Setting gain correctly during recording is critical: aim for peaks around -12 to -6 dBFS with room to spare.
Some modern recorders and interfaces use 32-bit float recording, which provides so much headroom that digital clipping is nearly impossible regardless of input level — the waveform can be corrected after the fact.