A virtual LAN, commonly known as a VLAN, is a group of hosts with a common set of requirements that communicate as if they were attached to the same wire, regardless of their physical location. A VLAN has the same attributes as a physical LAN, but it allows for end stations to be grouped together even if they are not located on the same LAN segment. Network reconfiguration can be done through software instead of physically relocating devices.
VLANs are created to provide the segmentation services traditionally provided by routers in LAN configurations. VLANs address issues such as scalability, security, and network management. Routers in VLAN topologies provide broadcast filtering, security, address summarization, and traffic flow management. By definition, switches may not bridge IP traffic between VLANs as it would violate the integrity of the VLAN broadcast domain.
Virtual LANs are essentially Layer 2 constructs, whereas IP subnets are Layer 3 constructs. In a LAN employing VLANs, a one-to-one relationship often exists between VLANs and IP subnets, although it is possible to have multiple subnets on one VLAN or have one subnet spread across multiple VLANs. Virtual LANs and IP subnets provide independent Layer 2 and Layer 3 constructs that map to one another and this correspondence is useful during the network design process.
Reference:
http://en.wikipedia.org/wiki/Virtual_LAN
