VPN means virtual private network. The word virtual means not physically existing but appears to exist physically. 

For example, a virtual computer is not a physical computer that you can touch or feel. However, it not only acts like a computer but it's also capable of performing tasks just like a real computer.

A local area network or LAN is a private computer network that interconnects computers within a limited area such as a home, school, or office building.

VPN is like LAN but the major difference between them is that devices that are in a VPN could be anywhere, not limited to a certain geographical area. 

They are connected to each other not over a private network but over public networks or the Internet.

VPN uses a technology called tunneling, a virtual point-to-point connection.

In simple terms, tunneling creates a secure encrypted connection or channel between your computer and other devices. 

With VPN, an employee can access his company’s network while sitting at home or in a hotel. Physically, he is outside but virtually he is inside. 

There are some other uses of VPNs such as bypassing Internet censorship. 

Many Iranian use VPNs to get around the firewall of Iran and gain access to the actual Internet. 

Another use is when you use public Wi-Fi, your browsing activities on non-HTTPS websites are visible to everyone nearby because your traffic is not encrypted. 

If you want more privacy you can connect to a VPN.