Component composition in Svelte means building UI by putting smaller components inside bigger ones. The Parent component imports the Child component and uses it in its markup. The Parent passes data to Child using props. Child receives the prop and renders content based on it. The rendering process starts with Parent, then Child renders inside Parent, and finally the full UI is shown to the user. Variables like props change as data flows from Parent to Child. Importing Child is necessary to use it. If no prop is passed, Child shows default or empty content.