Jails were introduced with several security and functionality improvements over the traditional chroot. While chroot was used to limit the scope of the file system for processes, jail is used to develop more complex virtualization scenarios, including running an almost full operating system inside a jail. This type of jail is commonly referred to as the Virtual Server. You can set up multiple jails on a host system (the actual operating system you installed on the physical hardware) that runs multiple, complete, FreeBSD systems running different software.
A virtual server is used when you want to test a new software or service in a test environment, without actually engaging the physical hardware. Another scenario is to set up jails for other people who want to have root access to the system. Giving root access of a jail, gives super-user power to users, without giving them full access to the host system. For example, different web hosting companies create jails and virtual dedicated...