$stateProvider is used in AngularJs to manage state changes and navigation within an application. It defines states that include a URL, template, and controller. States can be nested. $stateProvider works with $urlRouterProvider and $urlMatcherFactoryProvider to handle routing. The example shows setting up four states for "home", "aboutUs", "contactUs", and "queryString" pages using $stateProvider, with the associated URLs, templates, and a controller to retrieve route parameters. Clicking on links will match the state and load the correct view.