Next.js uses a file-based routing system, making it easy to create routes by creating folders and files. To add a new route like "/about," simply create a folder named "about" with a page.tsx file inside. Nested routes can be achieved by creating folders within folders. Dynamic routes allow for displaying user profiles without creating folders manually. By implementing dynamic routing, users can access specific user profiles within the dashboard. This intuitive system simplifies route creation and organization in Next.js, enhancing the development process for building complex applications.