Packet switching is a method of communicating information, as contrasted to circuit switching.

The following example is not technically 100% accurate, but it better explains the principle.

In packet switching, the “packet” is part of a file. So, for our example, you have an email. The packet contains one letter of that email, and where in the email that letter goes. The packet also has information about the origin and destination of the email. It also contains a tiny sliver of the letter next to it, in case that letter is lost.

The packets are then released into the internet. The packets can be bounced off of many nodes and switches, going all the way around the world if they have to, each going their own separate ways as internet traffic conditions permit. The data, transmitted at nearly the speed of light, makes it to its destination in milliseconds.

The letters have no reached their destination, but they are all jumbled up. The information in the packets tells your email program what order the letters go. If a few letters got lost along the way, the redundant information and your computer’s spell check fills in the gaps.

Again, keeping with the oversimplified example, we will now look at a circuit switched network. A circuit switch requires a dedicated line, meaning that the line must be active the entire time of the transmission. Electrical telegraphs, in their time, worked by sending an electrical signal across a long wire. When the current was active, it could be manipulated into code by pressing the telegraph key. When the current was inactive, the wire was simply a wire.

Skipping ahead to the development of the telephone, the telephone lines followed the same model as trains. Trains and telephones had points where the line would branch off, hence the word “trunks.” The telephone trunks would direct phone traffic to its termination point using electronic circuits.

To review, packet switching works by breaking data up into packets and sending it into a decentralized network; circuit switching works by keeping data along a dedicated line. Each method has proven reliability, and has its own set of advantages and disadvantages.

Additional Reading

The Ultimate Guide to Understanding and Defeating Packet Loss
What is Packet Loss?