Internet addresses have evolved over time from a fixed 32-bit structure to a more flexible classless system. Originally, addresses were divided into a network and host portion, with the network portion indicating how to route to the local or wide area network. This system proved too limiting and was replaced by classful addressing with classes A, B, and C, but this also had issues. The current classless system uses variable length network and host portions allocated by regional authorities, allowing for more flexible addressing that better fits different network needs.