NAT stands for Network Address Translation, a process that modifies the IP addresses of data packets as they pass through a router or gateway. It allows multiple devices on a local network to share a single public IP address when connecting to the internet.
By translating private IP addresses to a public IP, NAT keeps individual devices hidden from the outside world, enhancing network security. It also conserves the number of public IP addresses needed, which is crucial given the limited availability of IPv4 addresses.