What is the Quattro system used in the Audi A4?

I've heard that the Audi A4 features the Quattro system, but I'm not quite sure how it works and what its capabilities are. Can someone explain?

The Quattro system is Audi's proprietary all-wheel drive system. It uses a center differential to distribute power between the front and rear axles, providing improved traction and handling in various driving conditions.

Unlike most all-wheel drive systems, the Quattro system proactively distributes power to the wheels that have the most traction, rather than reacting after a loss of traction has occurred.