IEEE 802.1Q (also known as VLAN Tagging) was a project in the IEEE 802 standards process to develop a mechanism to allow multiple bridged networks to transparently share the same physical network link without leakage of information between networks (i.e. trunking). IEEE 802.1Q is also the name of the standard issued by this process, and in common usage the name of the encapsulation protocol used to implement this mechanism over Ethernet networks.
IEEE 802.1Q also defines the meaning of a virtual LAN or VLAN with respect to the specific conceptual model underpinning bridging at the MAC layer and to the IEEE 802.1D spanning tree protocol. This protocol allows for individual VLANs to communicate with one another with the use of a layer-3 router. See also Cisco's proprietary DTP, VTP and ISL for information on inter-switch and inter-VLAN communication.
As an illustration of the utility of VLANs, consider a company whose IT department wishes to provide separate logical networks for each department in the company while using only one physical corporate network. The IT department assigns a unique VLAN per department. Edge switches on the corporate network are configured to insert an appropriate VLAN tag into all data frames arriving from equipment in a given department. After the frames are switched through the corporate network, the VLAN tag is stripped before the frame is sent back to the department's equipment, possibly at a different geographical location. In this way, traffic from one department cannot be leaked to or snooped from another department.
Reference:
http://en.wikipedia.org/wiki/IEEE_802.1Q
