What is encapsulation, and what are segments, packets, and frames?

Encapsulation is the process where, as data moves down the stack on transmission, each layer wraps the data unit from the layer above in its own header (and the link layer also adds a trailer), so the higher layer's entire output becomes the lower layer's opaque payload. Concretely: the application hands its data to the transport layer, which prepends a TCP (or UDP) header to form a segment (TCP) or datagram (UDP); the internet layer prepends an IP header to form a packet; the link layer wraps that in a MAC header plus a frame-check trailer to form a frame; and the physical layer transmits it as bits. On receipt the process reverses, each layer strips and reads only its own header and passes the inside up. The key property is that each layer reads only its own header: a router examines the IP header to route a packet but never looks at the TCP or application data, and a switch reads only MAC addresses. The terminology (segment → packet → frame) maps to transport → internet → link and is worth knowing precisely. Encapsulation also explains protocol overhead, since every layer's header consumes bytes.