UNION - this function works by first finding all polygons that are touching or overlapping (including polygons completely contained inside of other polygons.) It then proceeds to merge them into a single polygon.
This is an extremely important function. For example, if you want to size your polygons to compensate for etch factor you must first run the union boolean.
It is also very useful for those who are using a variety of 2D analysis tools - The union function reduces the number of polygons that the analysis tool must process, speeding up the analysis.
The union function can booleanize as many layers as you specify into a single output layer. The output GDSII file is a flat one with only one layer in it.
Overlapping Polygons before Union function
Overlapping Polygons after Union function