So let's begin. To cut a long story short, the pentagon put out a contract to tender that would link multiple mainframes together, for use in real time. This would mean that one man at one terminal should be able to access multiple machines, share data and run programs on different systems. From this contract, the concept of packet switching and routers was born. Well, first up, lets dissolve one common misconception.
Many people use the phone system as an example when discussing the Internet.
Well, not really. A better one would be to use the post office as an example. Imagine that when you send a file from one computer to another it's like sending a letter. It first goes to your post office where it is examined, and it's decided if it's intended for someone that has an address that post office serves. If it's not, then it's forwarded to another post office for examination again.