A Local Area Network (LAN) is a group of computers in the same physical location that are connected in a network. When we say the computers are in the same location, this can be the same room or building, such as a home or office, or a larger space such as an entire office block or school. There may be two or three computers connected to the network, or there may be hundreds or even thousands – as long as they are located within the same limited physical location, it's still a LAN.

It's this definition that sets LANs apart from Wide Area Networks (WANs) and Metropolitan Area Networks (MANs). WANs and MANs (and you may see the term Campus Area Network or CANs used) are essentially multiple LANs connected together over a larger area, such as a city or a university campus.

There are two types of Local Area Network – client/server LANs and peer-to-peer LANs. A client or server LAN consists of a number of computers connected to a central server. All network devices like printers or hard disks are managed via the server. Each computer connects to the server via either an ethernet cable or a wireless signal. The presence of a central server means client LANs are capable of handling heavy workloads.

Peer-to-peer LANs do not have a central server, instead each computer in the network shares in the running of the network itself. The computers are all connected to the internet via the same router – this is how the majority of household LANs are set up.

There are a number of reasons why you might want to build a LAN at home, which we'll get into now. The advantages are pretty much the same as they are in business, where LANs are used all the time.