Reserved addresses are specific IP addresses set aside for special purposes within a network. These addresses are not assigned to individual devices but are used for functions like broadcasting messages or identifying local networks. For example, the address 127.0.0.1 is reserved for loopback testing, allowing a device to communicate with itself. Another category of reserved addresses includes those defined by the Internet Engineering Task Force (IETF) for private networks. These addresses, such as 192.168.0.0 to 192.168.255.255, are used within local networks and are not routable on the public internet, ensuring that they do not conflict with globally unique addresses.