File sharing is when a person on one computer can use the files from another computer while the file is still on the other computer. The computers that want to share files with each other must be connected via a network.
You can create a file sharing network on two or more Macintoshes as simply as sharing a printer through AppleTalk. For instance, my sister and I each have a computer in the same room, and our only connection to each other is that we print to the same printer-but that connection is enough to establish a network. She has a database that holds the names and addresses of the 500+ people on my user group mailing list. But when someone calls me and wants to be put on the mailing list, from my computer I can open the database that is on her computer and it appears on my computer and I can add the person’s name and it instantly shows up on her computer also.
File sharing may be more complex, of course. There may be a dedicated file server in a school lab or an office that has applications and documents and fonts that everyone else on the network can use.