Definition
An IP address is a numerical label assigned to every device connected to the internet, used to route traffic to the correct destination. IPv4 addresses use 32 bits and look like 76.76.21.21, four numbers from 0 to 255, giving about 4.3 billion possible combinations. IPv6 addresses use 128 bits and look like 2606:4700:4700::1111, longer, hexadecimal, and designed to solve the IPv4 address shortage with a practically unlimited address space. Every web server has at least one IP, and DNS exists to map human-readable domains to those addresses so visitors never type numbers. In web hosting, the distinction between a shared IP, used by many sites on one server, and a dedicated IP, used only by your site, matters for some legacy SSL workflows that predate SNI, email sender reputation, and a small number of geo-restricted use cases. Most modern hosting setups never require you to touch this distinction directly.
How it works
A web request from a browser carries the destination IP in the IP packet header; the network routes the packet through routers until it reaches the server. The server's reply carries the visitor's IP back. NAT, load balancers and reverse proxies all rewrite IPs along the way.
Why it matters
For most modern web hosting, you do not need to think about IPs at all: DNS handles the mapping. The cases where IP matters are dedicated IP requirements (some legacy SSL, some email-sender setups), abuse handling (a shared-IP blacklist hurts everyone on it), and geo-restricted access.