An IP (Internet Protocol) Address is a unique number used by all network devices to allow them to communicate with each other.
The communication (data traffic) is split up and sent in small packages, each with a specific IP number as it's destination. Routers, gateways, computers and switches in their path forward them in the right direction.
If the IP address is incorrect or doesn't exist, the package is deleted. This is why the IP address is so important, without it there would be no network.
The IP address of your computer can be assigned either by your ISP, or by a router in your home network.
One IP address can only be used for one computer, so if you want more than one computer you will need a router that can assign internal IP numbers to the computers in the network.
Click here to determine if your IP is external or assigned by a router
An IPv4 address usually looks something like this: 123.123.123.123
Each triple is a number between 0 and 255. If your IP is assigned by a router, it usually starts with 192.168.xxx.xxx