A LAN is a data communication system allowing a number of independent devices to communicate directly with each other, within a moderately sized geographical area over a physical communication channel of moderate data rate. Other related issue are explained as under.
Direct Communication
There is a direct communication between independent devices, which means that no device or station controls any other station; all stations are equal in this process.
Size
Communication should be between devices in a noderately sized geographical area. This implies that a LAN cannot include all computers inside a nation or even inside a city. Its physical size is limited to a building, campus, or a site.
Transmission Media
Communication should take place over a physical medium. Today, the interpretation of "Physical medium" is very broad. LANs today use guided transmission media (cable) that is dedicated to a particular LAN and is not public. LANs today also use unguided media which can be shared by other LANs. However, in this case, although the medium is shared, the channels are private.
Data Rate
The present data rate for LANs ranges from few megabits per second to gigabits per second, which probably increases in the future.