The 'Type Instantiation is Excessively Deep and Possibly Infinite' error in TypeScript is a common issue when working with complex, deeply nested types. This happens because TypeScript's type system can only handle a certain level of complexity before it gives up and throws this error. One way to fix this issue is to simplify your types, especially if you are using recursive types or utility types like `MappedTypes`. Breaking down the logic into smaller, more manageable parts can also help. Alternatively, you can temporarily switch to `any` in the problematic areas to bypass the error, although this sacrifices type safety. In some cases, enabling the `noErrorTruncation` option in `tsconfig.json` can provide more information about the error and guide you toward a solution. Understanding TypeScript’s type-checking limits is essential for managing complex types effectively and avoiding these issues.