In Python, indentation is used to indicate the structure of a program and to define blocks of code. Unlike many other programming languages, Python uses indentation to indicate the level of nested code blocks, rather than using curly braces or other special characters.

The level of indentation is determined by the number of spaces or tabs at the beginning of a line of code. It is important to be consistent with the indentation level throughout the program, as it affects the structure and meaning of the code.

Here is an example of how indentation is used in Python:

if x > 0:
    print("x is positive")
    if x < 10:
        print("x is less than 10")
else:
    print("x is non-positive")

In this example, the if and else statements are used to control the flow of the program. The statements that are executed depending on the conditions are indented one level, indicating that they are part of the nested block of code. This is the way python indentation works and it’s a way of defining scope of code blocks.

It’s important to note that in python, Indentation is mandatory and it helps in making the code readable and easy to understand.

Note: Python generally uses 4 spaces as indentation by default.