Let's begin with some short definitions. A computer is a more or less self-contained unit of computing hardware, consisting of at least one CPU and many peripherals. These peripherals are connected to the computer by parallel buses or are plugged into the motherboard directly, or use a short serial bus (such as a SCSI bus) that is not more than a few meters long.

A network is a collection of computers, called hosts, and the auxiliary hardware that allows them to transmit data to one another. This hardware may include specialized routing computers, wires, modems, DSU/CSUs and the telephone company. Just as important is the set of software that allows these computers to easily communicate data.

A local area network (LAN) is a small network, usually connecting fewer than 1000 computers which are no more than about a mile apart from each other. Ethernet is a standard technology that is employed to implement a LAN. IBM's token ring is another and there are several others. LANs are suitable for a small company, a single department or a single building (as long as it's not the Empire State Building.)

Larger areas enfolded into a network need a wide area network (WAN). These can be anywhere from one university campus to the entire world, and indeed the Internet is the wide area network par excellence, encompassing hundreds of millions of users, many thousands of networks and lots of computers. The technologies used for WANs are very different from those suitable for LANs.