Tunneling
In plain terms
Encapsulating one network protocol's traffic inside another.
Going deeper
Tunneling wraps packets inside another protocol to traverse networks securely or transparently, as VPNs do. It creates a virtual path through an existing network.
Under the hood
Enables VPNs and connecting incompatible networks; adds overhead and sometimes MTU issues.
Examples
VPNs, GRE, IPsec, SSH tunnels, connecting private networks.
Think of it like...
Like sending a sealed envelope inside another envelope to pass through a different mail system.