The physical principle that explains why objects float in water is known as buoyancy, governed by Archimedes' principle. This principle states that an object submerged in a fluid experiences an upward force equal to the weight of the fluid it displaces. An object will float if its density is less than that of the fluid; otherwise, it will sink. Buoyancy is crucial in various applications ranging from shipbuilding to understanding submarine behavior, demonstrating the balance between forces acting on objects in fluids.