Ultrafast dynamical processes in magnetic systems have become the subject of intense research during the last two decades, initiated by the pioneering discovery of femtosecond laser-induced demagnetization in nickel. In this thesis, we develop theory for fast and ultrafast magnetization dynamics. In particular, we build relativistic theory to explain the magnetization dynamics observed at short timescales in pump-probe magneto-optical experiments and compute from first-principles the coherent laser-induced magnetization. In the developed relativistic theory, we start from the fundamental Dirac-Kohn-Sham equation that includes all relativistic effects related to spin and orbital magnetism as well as the magnetic exchange interaction and any external electromagnetic field. As it describes both particle and antiparticle, a separation between them is sought because we focus on low-energy excitations within the particle system. Doing so, we derive the extended Pauli Hamiltonian that captures all relativistic contributions in first order; the most significant one is the full spin-orbit interaction (gauge invariant and Hermitian). Noteworthy, we find that this relativistic framework explains a wide range of dynamical magnetic phenomena. To mention, (i) we show that the phenomenological Landau-Lifshitz-Gilbert equation of spin dynamics can be rigorously obtained from the Dirac-Kohn-Sham equation and we derive an exact expression for the tensorial Gilbert damping. (ii) We derive, from the gauge-invariant part of the spin-orbit interaction, the existence of a relativistic interaction that linearly couples the angular momentum of the electromagnetic field and the electron spin. We show this spin-photon interaction to provide the previously unknown origin of the angular magneto-electric coupling, to explain coherent ultrafast magnetism, and to lead to a new torque, the optical spin-orbit torque. (iii) We derive a definite description of magnetic inertia (spin nutation) in ultrafast magnetization dynamics and show that it is a higher-order spin-orbit effect. (iv) We develop a unified theory of magnetization dynamics that includes spin currents and show that the nonrelativistic spin currents naturally lead to the current-induced spin-transfer torques, whereas the relativistic spin currents lead to spin-orbit torques. (v) Using the relativistic framework together with ab initio magneto-optical calculations we show that relativistic laser-induced spin-flip transitions do not explain the measured large laser-induced demagnetization. Employing the ab initio relativistic framework, we calculate the amount of magnetization that can be imparted in a material by means of circularly polarized light – the so-called inverse Faraday effect. We show the existence of both spin and orbital induced magnetizations, which surprisingly reveal a different behavior. We establish that the laser-induced magnetization is antisymmetric in the light’s helicity for nonmagnets, antiferromagnets and paramagnets; however, it is only asymmetric for ferromagnets.