The node-polyfill-webpack-plugin package automatically provides Node.js polyfills for Node.js core modules when used in webpack projects targeting browsers. This simplifies configuring webpack for frontend development by eliminating manual dependency management for common Node.js modules like fs, path, and util. It enhances compatibility, reducing errors related to missing Node.js APIs in browser environments and streamlining the build process for npm packages intending to run both client-side and server-side.