Private IP Addresses are special blocks of IP Address in the form xxx.xxx.xxx.xxx they are reserved for special purposes. A private IP Address is a non-Internet IP Address that is used within a Local Area Network or LAN. Private IP Addresses are used to connect a network group of computers (2 or more) over a very small geographic area such as a home office, an office building or at the most, a small group of office buildings.
Private IP Addresses are used by the network to identify computers that belong on the network. Networks use devices to send packets of information within the network. Those devices are routers and they are specially designed to recognize the difference between a normal IP Address and a private IP Address.
Even though a Local Area Network can be connected to the Internet, the data that is contained within that network will not be released to the Internet. Routers and other connective devices are designed to prevent Private IP Addresses from being used on the Internet.
As mentioned Private IP Addresses have a specific numerical range. Those are 10.0.0.0 -10.255.255.255 which equates to 16,777,216 private IP Addresses within that range. Another block of Private IP Addresses is 172.16.0.0 – 172.31.255.255 which equates to 1,048,576 private IP Addresses. The third range is 192.168.0.0 – 192.168.255.255 which equates to 656,536. Why is this important to know. Well, Private IP Addresses are usable to everyone. This means that anyone who wants to hook up a LAN can do so simply buy using any IP Address within these IP Address ranges. It does not matter if your neighbor sets up a home network and uses the exact same private IP Addresses that you have configured into your network. Networks are individual groups of computer and can not be connected without purposely connecting them. If two networks were to be connected than, and only then would it be necessary to ensure that no two devices shared the same private IP Address.
To connect a Local Area Network to the Internet will require the use of, at the least, one IP Address that is not within the private numerical range. So while a LAN can be connected to the Internet, the connecting devices and routers understand the difference between a real IP Address and a Private IP Address. The range of Private IP Addresses is so large so that companies can expand their network without running out of private IP Address.
The benefit of creating a local area network is that they allow more than one computer to share resources such as printers, Internet connections, and data. They also allow for much faster use of data and centralized storage of data on servers, etc.
In short, a Private IP Address allows a group of computers to connect to share resources, data, and files, within a small geographic area. There is a difference between a private IP Address and an IP Address that is used to access the Internet which is recognized by routers and Internet connection devices.