The error 'Object Literal May Only Specify Known Properties' in React + TypeScript occurs when useState is not properly typed for a state with objects.
To resolve this error, define a type or interface for the state object to provide type safety and enable autocomplete functionality.
By defining a type or interface, such as User with uid and name fields, you ensure better type safety, autocompletion, and improved debugging in React components.
Best practices for using useState with objects include always typing your state, using 'null' for optional states, preferring interfaces for clarity, and validating before rendering for cleaner and more robust components.