setState is a method used in React to update the state of a component. When setState is called, React re-renders the component and its children, reflecting the updated state.

Here's a detailed explanation of what happens under the hood when setState is called:

1. State Update Queue: React maintains a queue of state updates for each component. When you call setState, React enqueues the state update into the respective component's update queue.

2. Batch Updates: By default, React batches multiple state updates that occur during the same event handler or lifecycle method. This batching optimizes performance by reducing the number of component re-renders. React will only perform a single re-render at the end of the event or lifecycle method, applying all the enqueued state updates.

3. Merging State Updates: If you call setState multiple times within the same event or lifecycle method, React merges the updates together. It performs a shallow merge of the new state values with the existing state object. This means that only the specified state properties are updated, while the other properties remain unchanged.

4. State Transition: Once the component is ready to update its state, React schedules a re-render. It starts the reconciliation process by comparing the new state with the previous state. React determines the differences between the virtual DOM representation of the component before and after the state update.

5. Reconciliation: React performs a process called reconciliation to efficiently update the actual DOM. It analyzes the changes in the virtual DOM and calculates the minimum number of changes required to bring the actual DOM in sync with the updated virtual DOM representation.

6. Component Re-render: After reconciliation, React updates the component's rendered output in the actual DOM, applying the necessary changes based on the state update. React also updates the state of child components recursively, if needed.

7. Lifecycle Methods: During the re-render process, React invokes the appropriate lifecycle methods (such as render, componentDidUpdate, etc.) to allow you to respond to the state update and perform any necessary side effects.

8. State Update Callback: Optionally, you can pass a callback function as the second argument to setState. This callback is invoked after the state has been successfully updated and the component has re-rendered.

It's important to note that setState does not immediately mutate the component's state object. Instead, it enqueues the state update and triggers a re-render, which eventually updates the state. Therefore, if you try to access the updated state immediately after calling setState, you might still get the previous state value. If you need to perform any actions after the state has been updated, you can use the lifecycle method componentDidUpdate or the useEffect hook.