An IP address is a unique set of numbers that identifies a computer connected to the Internet or any other network. The computer needs this identity so that other computers can send it data, and vice versa. It is similar to people having a postal address.
Every device on a network, including servers, routers, printers, modems and individual computers has an IP address.
The most common form of IP address in use today use IPv4 (Internet Protocol version 4), which has four sets of numbers separated by dots.
The ever-increasing number of computers on the Internet means an eventual shortage of IP addresses. IPv6 (Internet Protocol version 6) aims to overcome this problem and uses a different addressing system.
The Internet Assigned Numbers Authority (IANA) and various regional authorities allocate blocks of IP addresses to Internet Service Providers (ISPs). They in turn allocate individual IP addresses to their customers.
IP addresses are either "static" or "dynamic". A static IP address is a permanent identification of an individual device, while a dynamic one is temporary. For example, each time a home computer connects to the Internet it receives a different dynamic IP address from the ISP. This means that the network requires fewer IP addresses.
A website domain also has an IP address. For example, the IP address for www.google.com at the time of writing was 66.249.89.147.