Normally a hub is used to connect a small sub-domain of an organization. Each classroom at school has it’s own hub which they connect to. These are known as sub-domains. However it is normal for sub-domains to communicate with each other. In order to do this they must use a router. A router knows about all of the computers connected to each domain. As such when it receives a message for a different domain, it can perform the forwarding. Unlike a hub, it knows exactly where to send each packet. As such packets do not get broadcast across all of the sub-domains.

Routers will look inside the packet at the destination address. It will then send the packet to the correct port. This is much more efficient than the broadcast technology of a hub. Of course routers tend to be much more expensive to buy and much more complicated to maintain. This is why they tend to be used to connect smaller, sub-domains into a larger one.