Reference: What is Virtualization or the new term Virtuation?

In computing, virtualization is a broad term that refers to the abstraction
of computer resources. One useful definition is "a technique for hiding the
physical characteristics of computing resources from the way in which other
systems, applications, or end users interact with those resources. This
includes making a single physical resource (such as a server, an operating
system, an application, or storage device) appear to function as multiple
logical resources; or it can include making multiple physical resources
(such as storage devices or servers) appear as a single logical
resource."[1]
However, the term is an old one: It has been widely used since the 1960s or
earlier, and has been applied to many different aspects and scopes of
computing - from entire computer systems to individual capabilities or
components. The common theme of all virtualization technologies is the
hiding of technical detail, through encapsulation. Virtualization creates an
external interface that hides an underlying implementation, e.g. by
multiplexing access, by combining resources at different physical locations,
or by simplifying a control system. Recent development of new virtualization
platforms and technologies has refocused attention on this mature concept.
Like such terms as abstraction and object orientation, virtualization is
used in many different contexts. This article reviews common uses of the
term, divided into two main parts:
. Platform virtualization involves the simulation of computer environments.
. Resource virtualization involves the simulation of combined, fragmented,
or simplified resources.
Of course, virtualization is also an important concept in non-computer
contexts. Many control systems implement a virtualized interface to a
complex device; thus a modern car's gas pedal does much more than just
increase the flow of fuel to the engine; and a fly-by-wire system presents a
simplified "virtual airplane" which may have little to do with the physical
implementation.
An also useful concept is that which opposes virtualization to transparency:
something is virtual when it is visible, perceivable, but does not
physically exist in the form perceived (e.g. virtual storage); and is
transparent when it exists in the real world, but is not visible in use
(e.g. location transparency).