A virtual network is a network defined inside a computer using a virtual switch that one or more virtual machines or containers may connect to using virtual network interfaces.
From an IP address configuration perspective, a virtual network looks just like any other network segment. A virtual switch is used to pass packets between virtual machines and containers. Sometimes, network address translation is also performed.
Virtual Networks Spanning Multiple Computers
A virtual network may also extend to multiple servers. In this case, it's virtual switch is also connected to a physical network interface. Often the physical network interface is configured to use VLAN tagging to enable multiple virtual networks to share the same physical cable.