Inertial reference frames are defined as those free from external forces, where Newton's laws of motion apply. Non-inertial reference frames experience acceleration and are influenced by fictitious forces, such as the Coriolis force. The discussion clarifies that inertial frames are not restricted to Euclidean space, as they can exist in various geometrical contexts. The distinction between these frames is crucial for understanding dynamics and motion. Overall, the conversation emphasizes the fundamental differences in how forces and motion are perceived in inertial versus non-inertial frames.