Networking Private Networks
The University of Findlay's College of Education

When the creators of TCP/IP wrote the original specification, they left several IP address ranges out of all routing processes. These ranges were intended to be used for "research" of one kind or another. As the world began to use all the available "real" IP numbers, these "research" numbers became critical to the expansion of the Internet.

These addresses are not routed on the Internet:

10.X.X.X	Class A - 1 range - 16 million total addresses
172.16.X.X - 172.31.X.X	Class B - 16 ranges - 1 million total addresses
192.168.X.X	Class C - 256 ranges - 65 thousand total addresses

Other important IP numbers

127.0.0.1	Loopback Address - also called Localhost
0.0.0.0	Used for computers that use BOOTP or DHCP
169.254.X.Y	Auto-configuration range - A NIC will auto-assign an IP address in this range if the NIC is configured for DHCP and a DHCP server is not available. Apple uses this range for Rendezvous.
255	Any IP address with a 255 is invalid

Using private network addresses, two different groups (ex: two different school districts) can each use the same private IP addresses. If each school district introduces a NAT server, each can have Internet connectivity as well.

This is because private IP addresses are not routed across the Internet.