File handling in C allows programs to perform operations on files stored on the local file system such as creation, opening, reading, writing and deletion of files. Common file handling functions include fopen() to open a file, fprintf() and fscanf() to write and read from files, fputc() and fgetc() to write and read single characters, and fclose() to close files. Binary files store data directly from memory to disk and allow for random access of records using functions like fseek(), ftell() and rewind(). Command line arguments can be accessed in the main() function through the argc and argv[] parameters.