"Circles" are a feature designed to manage and understand the various relationships in a user's network. They act as a way to represent the different layers of intimacy, trust, and context-specific connections one might have with others. Circles allow users to categorize their relationships based on factors like closeness or shared interests, aiding in building and maintaining stronger, more meaningful connections. This tool is especially useful for organizing contacts according to different areas of one's life, enhancing the personalization and relevance of interactions within the Bonfire network.