What are your strategies for creating and managing test data that reflects real-world scenarios?

Accurate and realistic test data is essential for effective testing, as it helps ensure that tests reflect how the application will perform in real-world conditions. This question invites QA professionals to share their strategies for generating, managing, and maintaining test data that closely mimics real user environments. It addresses challenges such as handling sensitive data, ensuring data variability, and keeping test data up-to-date as the application evolves. How do you create and manage test data that accurately represents real-world scenarios, and what tools or techniques do you rely on to do so?