Originally a printing workaround — presses couldn't reproduce continuous photographic tone, so dark areas got large dots and light areas small ones, and the eye blended them (1880s newspaper printing).
On the web it's approximated by tiling a radial-gradient dot into a grid. A more precise version maps an image's brightness to actual dot size with an SVG pattern and feComponentTransfer.
When to use
Use for pop-art/comic illustration, a reprinted-newsprint mood. Laid over small text it badly hurts legibility.