Network basics – the OSI model
It's convenient to discuss network and application concepts in terms of layers, with each layer being roughly responsible for higher and more abstract functions at upper levels, and more nuts and bolts primitives as you travel down the stack. The following diagram describes the OSI model in broad terms:
Figure 3.1 – The OSI model for network communication, with some descriptions and examples
In regular usage, the layers are often referenced by number, counting from the bottom. So, a Layer 2 problem will usually involve MAC addresses and switches, and will be confined to the VLAN that the station is in (which usually means the local subnet). Layer 3 issues will involve IP addressing, routing, or packets (and so will involve routers and adjacent subnets of more distant networks).
As with any model, there's always room for confusion. For instance, there's some longstanding fuzziness between Layers...