Empathy is the ability to understand and share the feelings of another. Empathy is a fundamental attribute of human psychological makeup; without being able to conceptualize other people's perspectives, each of us would perish alone rather than survive together. Individual human beings are rather frail physically and we function within social groups, so empathy is crucial to our collective way of life. Even at the most basic level, an adult must be able to emphasize with an infant to nurture it, as our memories of our own infancy fade quickly.
One excellent example from literature is from To Kill a Mockingbird. Atticus Finch repeatedly gives advice to his children that they need to try to understand the other person by imagining what it's like to put on their shoes or crawl inside their skin and walk around. That sort of identification with another will help stop rash judgments and generate ways to open dialogues.
Too much empathy can have negative consequences, such as the burnout social workers often face, or interference with decision-making because of excessively anticipating the effects on others.