A VPN is short for “Virtual Private Network”. It is a secure encrypted connection between your computer and vpn server.
A virtual private network (VPN) extends a private network across a public network, such as the Internet. It enables a computer to send and receive data across shared or public networks as if it is directly connected to the private network, while benefiting from the functionality, security and management policies of the private network. A VPN is created by establishing a virtual point-to-point connection through the use of dedicated connections, virtual tunneling protocols, or traffic encryptions.
A virtual private network connection across the Internet is similar to a wide area network (WAN) link between sites. From a user perspective, the extended network resources are accessed in the same way as resources available within the private network.
VPNs allow employees to securely access their company’s intranet while traveling outside the office. Similarly, VPNs securely connect geographically disparate offices of an organization, creating one cohesive network. VPN technology is also used by Internet users to connect to proxy servers for the purpose of protecting personal identity and location.
You can find more about vpn in Wikipedia.