In modern React development, CSS modules have emerged as a powerful solution to tackle the challenges posed by global CSS. They offer a mechanism to write CSS that’s scoped to individual components, reducing the risk of unintended side effects throughout the application.

CSS modules work by transforming class names into unique, generated names. This ensures that the styles defined in one module won’t interfere with styles in another. So, rather than having globally applied styles, each React component is paired with its own CSS module, ensuring the styles are encapsulated and only affect that specific component.

To utilize CSS modules in a React project, the setup generally involves specific configurations in build tools like Webpack or Create React App. In Webpack, for instance, the CSS loader is often used in conjunction with the style loader to enable support for CSS modules. 

Using CSS modules in React is straightforward. Instead of importing a CSS file traditionally, you import it as a JavaScript module. For instance, if you have a file named `Button.module.css` with a style `.primary`, in your React component, you’d import it like so: `import styles from ‘./Button.module.css’`. To apply the `primary` style to an element in your component, you’d use it as `styles.primary`.

The main advantage of this approach is the assurance that class names are locally scoped by default. You don’t have to worry about naming collisions or overrides from other stylesheets. Moreover, since you’re importing styles as JavaScript objects, you can leverage the power of JavaScript for dynamic styling, conditional application of styles, and more.

CSS modules offer a robust solution for style encapsulation in React applications. They provide a clean and efficient way to marry the power of CSS with the component-based architecture of React, ensuring maintainable and bug-free styling.

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Seasoned Software Engineer specializing in React.js development. Over 5 years of experience crafting dynamic web solutions and collaborating with cross-functional teams.