How does Python treat a directory containing init.py compared to one without it?

Python raises an error for both cases.
Python recognizes the one with init.py as a package.
Python recognizes the one without init.py as a package.
Python treats both directories the same way.

Python treats a directory containing __init__.py as a package. It allows you to import modules and sub-packages from within it. A directory without __init__.py is treated as a regular directory, and Python won't consider it a package, limiting its use for organizing code.

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