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In your car, the firewall sits between the engine compartment and the front seat and is built to keep you from being burned by the heat of the combustion process. Your computer has a firewall, too, for much the same reason – to keep you and your data from being burned by hackers and thieves who are the unfortunate creators of "Internet combustion" and destruction.
The firewall, a "combo" approach of software that regulates and monitors hardware and communications protocols, is there to inspect network traffic and all the "packets" of information that pass through to your inner sanctum, your CPU and hard drives. A firewall will rule out the possibility of harm, or at least greatly minimize, by noting and quarantining potentially harmful "zones" and will either deny or permit access to your computer based on the current set of rules that applies at the time, depending on many (very many) factors.
Basic tasks and settings
The basic task for a firewall is to regulate of the flow of traffic between different computer networks that have different "trust levels." The Internet is full of countless overlapping zones, some safe and some totally deadly. On the other hand, internal networks are more likely to contain a zone or zones that offer a bit more trust. Zones that are in between the two, or are hard to categorize, are sometimes referred to as "perimeter networks" or, in a bit of geek humor, Demilitarized Zones (DMZ).
Without proper configuration, a firewall can simply become another worthless tool. Standard security practices call for a "default-deny" firewall rule, meaning that the only network connections that are allowed are the ones that have been explicitly okayed, after due investigation. Unfortunately, such a setup requires detailed understanding of network applications and a great deal of time and energy to establish and administer.
Who can do what?
Many businesses and individuals lack sufficient computer and network knowledge to set up a default-deny firewall, and will therefore use a riskier but simpler "default-allow" rule, in which all traffic is permitted unless it has been specifically blocked for one of a number of possible reasons. This way of setting up a firewall makes "mysterious" and unplanned network connections possible, and the chance your system may be compromised becomes much more likely.
Firewall technology had its first growth period in the computer technology revolution of the late 1980s, when the Internet was a fairly new in terms of its global reach and connectivity options. The predecessors to today’s hardware/software hybrid firewalls were the routers used in the mid 1980s to physically separate networks from each other. However small the Internet began, it was ultimately undone by supremely fast growth and the lack of security planning, and therefore there were the inevitable breaches caused by older ("prehistoric") firewall formats. Fortunately, computer pros learn from their errors, and the firewall technology continues improving daily.
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