Hierarchical Addressing and Routing?

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Network layer must provide services to direct packets to their destination host. The source and destination hosts are not always connected to the same network. In fact, the packet might have to travel through many different networks. Along the way, each packet must be guided through the network to reach its final destination. Intermediary devices that connect the networks are called routers. The role of the router is to select paths for and direct packets toward their destination. This process is known as routing. During the routing through an inter-network, the packet may traverse many intermediary devices. Each route that a packet takes to reach the next device is called a hop.

A hierarchical address uniquely identifies each host. It also has levels that assist forwarding packets across inter-networks, enabling division based on those levels. So, hierarchical addressing supports communications between inter-networks. Postal addresses are examples of hierarchical addresses. Referring only to the relevant address level (country, state, city, etc.) at each stage makes this process very efficient. No need at each stage to know the all details (except Last). IP addresses work in a similar way. IP addresses have a network portion and a host portion. Routers forward packets between networks using only the network portion. Once delivered, the whole address will have been used to deliver the packet.

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http://www.bitmindframes.info/grouping-devices-into-networks-and-hierarchical-addressing