Caching is a technique widely used in computing to increase performance by keeping frequently accessed or expensive data in memory. In context of web application, caching is used to retain the pages or data across HTTP requests and reuse them without the expense of recreating them.ASP.NET has 3 kinds of caching strategies

Output Caching, Fragment Caching, Data Caching 
CachingOutput Caching: Caches the dynamic output generated by a request. Some times it is useful to cache  the output of a website even for a minute, which will result in a better performance. For caching the whole page the page should have OutputCache directive.<%@ OutputCache Duration="60" VaryByParam="state" %>
Fragment Caching: Caches the portion of the  page generated by the request. Some times it is not practical to cache the entire page, in such cases we can cache a portion of page<%@ OutputCache Duration="120" VaryByParam="CategoryID;SelectedID"%>
Data Caching: Caches the objects programmatically. For  data caching asp.net provides a cache object.
For e.g.: cache ["States"] = dsStates;