IP Masquerading is a technique used in computer networking that allows multiple devices on a private network to share a single public IP address. This is commonly implemented in Network Address Translation (NAT) systems, where the router modifies the outgoing IP packets to appear as if they originate from the router itself. This helps conserve the limited number of available public IP addresses. When data is sent back to the public IP address, the router uses its internal table to direct the incoming packets to the correct device on the private network. This process enhances security by hiding the internal IP addresses from external networks, making it harder for potential attackers to target specific devices.