The phenomenon that explains why a pencil appears bent when placed in water is called refraction. This optical effect occurs because light travels at different speeds in different mediums, causing it to change direction when it passes from air to water. When light rays enter the water, they slow down and bend, creating the illusion that the pencil is broken or bent at the water's surface. Understanding refraction is essential in various fields, including optics and various technologies that rely on light behavior.