One of the most common questions I get asked is "What exactly is port forwarding?"
So many other sites and information on the internet seem to always give long winded answers as if they are explaining it to another fellow tech. This makes it rather difficult for a non tech to really understand what it is, why it is important, and why its always good to be behind a router and not directly connected to the internet.
So here is my answer I give people, short and sweet :-)
Port forwarding is rather simple. A router takes a internet connection and
routes it to multiple computers (hence the name router)
When someone tries to connect to your computer from the internet the routers sees the connection and looks at the port forwarding rule on which computer to send the connection to. If there is no rule the connection is dropped. This is also why routers help protect people on the net. It keeps people, hackers, viruses anything really from connecting to your system on any port they wish.
So when you put in a new port forwarding rule you are simply telling the router what to do with the incoming connection, that's all there is to it. :-)
That's why port forwarding is needed when you are using a program on your computer that accepts incoming connections. Otherwise the router doesn't know what to do and just kicks the connection.
That's it, what port forwarding is in a nutshell.
On a side note, some people worry if they port forward their system will become compromised and no longer secure. This isn't always true, your computer has 65,535 possible TCP ports. Operating systems like Windows uses certain ports all the time, like for file sharing and remote desktop. Well since those ports are not port forwarded they are still protected behind the router. Where as is you where not behind a router, or had ALL your ports open through port forwarding or DMZ then you leave your system wide open to possible attacks on weak points. But as long as you keep your operating system up to date and are behind a router you will be fine opening only the ports you need ports for P2P, gaming and such.
Hope this helps explain it and makes it a little easier to understand.