Virtualization is a term which describe the virtual version of resources.
Like Virtual hardware, Virtual OS, Virtual Storage, virtual Network resources.
How does it work: we can divide or simulate a single resource into multiple instances like..
We have hardware and we are dividing these resources on multiple virtual machines.
We storage which we can simulate as a SAN or NAS.
Between the virtual environments we can create a virtual network, virtual switches.
For a end user every virtual thin work as a real this is a power of virtualization.