NAT, Network Address Translation in simple terms translates an IP address into another. Network Address Translation is of different types like
Static NAT (One to One)
Dynamic NAT (Many to Many)
Overloading (Many to One)
We will focus on Overloading form of NAT. This is called as Port Address Translation (PAT) or even Network Address Port Translation (NAPT). NAT Overloading translates many private IP addresses from a Local Area Network (LAN) onto a single registered legal Public IP address. Here, the source IP and the source port gets translated to the Public IP and a different source port.
Typical network configuration would be on an Internet Router which enables all the hosts in the LAN to connect to the Internet using one single Public IP address.