Networks operate in layers, each one solving a small part of the data communication problem. Each layer on a sender talks to the same layer on a receiver–they are logically connected by the network. Each layer is also unaware (mostly) of the details handled above or below it.
On a sending host, data travels "down" the stack, with control information added at each layer. The data and control information can be called a "packet," though more specific (and confusing) terms exist. (A packet is like a letter inside many envelopes–one for each layer it traverses.) At the "bottom" the packet is physically transmitted out of the host.
On a receiving host, each layer accepts the packet from the layer below, removes its control information and passes the smaller packet to the layer above.