TCP/IP is a set of protocols that allows networks to interconnect and exchange data. It uses IP for addressing devices and routing packets between networks, while higher level protocols like TCP and UDP provide reliability and port addressing for specific applications. TCP provides reliable, ordered connections, while UDP is simpler and used for applications like streaming media that can tolerate packet loss. Networks are connected via routers that route packets between IP addresses. This allows different networks using different link layer technologies like Ethernet to interconnect.