RAC, or Real Application Clusters, is a feature of Oracle's database system that enables a database to be set up on several servers. This setup ensures high availability, allowing the database to keep running on other servers if one server fails. Additionally, it facilitates load balancing, distributing the database workload uniformly across multiple servers to avoid overloading any single node. This aspect of RAC also enhances scalability, making it simple to add resources to handle growing traffic and data.