What is the difference between a switch and a router?

Most industrial networks are solely 'switched' networks. That is, all the active network elements are 'Layer 2' devices, or Switches, and this means typically that there is a single IP address range used. Routing is introduced when networks get large, and there is the need to contain network traffic to specific 'subnets' within the network. By this means, network functions can be segregated with controlled interconnection, and network problems (such as broadcast storms) are contained to each subnet. This segregation function can also be achieved through the use of VLANs, which are a common function in managed switches.

To fully address this question requires reference to the 7 layer OSI model. A switch operates only at the 'Datalink' level, or 'Layer 2', which involves identifying a path through a network based on the hardware MAC address. A router operates at the 'Network' or Layer 3 level, which involves reference to the IP address with which most people are familiar. While a router can receive a message and forward it based purely on its IP address, a switch can not do this, and must resolve the MAC address relating to a destination address through use of protocols such as the Address Resolution Protocol (or ARP).

Unless a network is large or needing to accommodate a large number of disparate systems, a managed switch is the standard network device.