Network Address Translation

(NAT) is the virtualization of Internet Protocol (IP) addresses.
NAT is described in general terms in IETF RFC 1631.
It conserves the number of globally valid IP addresses a company needs, and in combination with Classless Inter-Domain Routing (CIDR), has done a lot to extend the useful life of IPv4.

NAT gateways sit between two networks, the inside network and the outside network.
Systems on the inside network are typically assigned IP addresses that cannot be routed to external networks (e.g., networks in the 10.0.0.0/8 block). A few externally valid IP addresses are assigned to the gateway and the gateway makes outbound traffic from an inside system appear to be coming from one of the valid external addresses.