Short answer
NAT lets computers, phones and other devices in the same network share one public IPv4 address through the router.
Why NAT is used
IPv4 addresses are limited. NAT lets many private devices use one public address toward the internet.
In a home network, the router normally keeps track of which internal device belongs to each connection.
NAT and incoming connections
NAT makes it harder for external computers to reach a device directly. That is why port forwarding is often needed if you run a server at home.
NAT and IPv6
IPv6 normally does not need NAT in the same way because the address space is much larger. A firewall is still needed.
Common questions
Is NAT a firewall?
No, but NAT can reduce direct access from outside. A real firewall controls traffic with explicit rules.
Can NAT affect games and video calls?
Yes, some services may need UPnP, port forwarding or relay servers when NAT gets in the way.