A LAN includes all systems in the broadcast domain. That is, all of the systems on a single LAN receive a broadcast sent by any member of that LAN. By this definition, a LAN is bordered by routers or other devices that operate at OSI Layer 3.
Now that we've defined a LAN, what is a VLAN? VLAN stands for virtual LAN. A single VLAN-capable switch is able to participate in multiple LANs at once.
This functionality alone has a variety of uses, but VLANs become far more interesting when combined with trunking. A trunk is a single physical connection that can carry multiple VLANs. Each frame that crosses the trunk has a VLAN identifier attached to it, so it can be identified and kept within the correct VLAN.
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