The network layer is responsible for packet forwarding including routing through intermediate routers. It controls the operation of the subnet and decides which physical path data takes. Routing is the process of moving packets from source to destination, usually performed by routers. Internetworking connects different network technologies like LANs and WANs using devices like routers. The network layer uses IP addressing to identify devices and enable routing. Private IP addresses identify internal devices while public addresses provide external internet access.