Caching is the single highest-leverage change you can make to a WordPress site, and yet it is also the easiest to get subtly wrong. The goal is simple: avoid doing work twice. If a page does not change between two visitors, there is no reason to run PHP, query the database, and assemble the HTML all over again for the second one.
There are really three layers worth knowing. Page caching stores the finished HTML so repeat requests skip PHP entirely. Object caching stores the results of expensive database queries in memory, using Redis or Memcached, which helps logged-in and dynamic pages that cannot be fully page-cached. Browser caching tells the visitor’s browser to keep static assets locally so they are not re-downloaded on every navigation.
Know Your Layers
A content delivery network sits on top of all of this. Rather than every request travelling to your origin server, a CDN serves cached copies from a location near the visitor. For a global audience this cuts hundreds of milliseconds off the connection before a single byte of HTML is sent.
The mistake people make is enabling everything at once and then being unable to tell which layer broke when a price or a cart total goes stale. Turn them on one at a time, confirm the cache is actually being hit by reading the response headers, and set sensible exclusions for pages that must stay dynamic, such as checkout and account pages.
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