Packet-switched networks break data into smaller packets before sending them over a network. Each packet can take different paths to reach its destination, where they are reassembled in the correct order. This method allows for efficient use of network resources and can handle multiple communications simultaneously. Unlike traditional circuit-switched networks, which establish a dedicated connection for the entire duration of a call, packet-switched networks are more flexible. They can adapt to varying traffic loads and are commonly used in technologies like the Internet and VoIP services, making them essential for modern communication.