Packet switching is a digital data transmission method where data is segmented into packets. Each packet is tagged with a header that includes the destination information. These packets are then independently routed through the network to their destination, where they are reassembled into the original data.

There are two primary methods of packet switching:

1. Datagram Packet Switching: In this method, each packet is routed independently, relying on its destination address. The routing is dynamic, leading to the possibility of packets taking different paths and arriving at the destination in a different order from which they were sent.
2. Virtual Circuit Packet Switching: Here, a predetermined route is established before any packets are sent. All packets follow this set route, simplifying the network routing process and ensuring that packets arrive in the order they were sent.

Packet-switched networks were developed as a more efficient alternative to analogue circuit-switched networks, which were less effective for short messages and prone to noise and errors.

The most extensive example of a packet-switched network is the internet, which primarily utilizes the datagram packet switching method. On the other hand, X.25 is an example of a network based on virtual circuit packet switching. These digital networks have significantly enhanced data transmission efficiency and reliability compared to their analogue predecessors.