Rancidity occurs when lipids in certain foods undergo oxidation reactions due to factors like light, oxygen, trace elements, salt, water, bacteria, and molds. This produces compounds that cause odors and off-flavors, making the food stale. Foods high in lipids that are prone to rancidity include potato chips, butter, meat, cod liver oil, and dry fruits. Rancidity can be prevented by using antioxidants, vacuum packaging, refrigeration, inert gas packaging, and storing foods in a dark place to reduce oxidation reactions. Rancid fat can destroy vitamins and cause issues like anemia, dermatitis, diarrhea, and cancer.