Clients typically connect in one of two modes: adhoc or infrastructure. Adhoc mode involves stations communicating directly with each other without the need for a central point to manage communications. This is also known as peer-to-peer mode. The default and most common mode is known as Infrastructure mode. Infrastructure mode uses a Wireless Access Point (WAP), which is a central device that manages transmissions between clients. Refer to the following for more details on Access Points:

From Wikipedia.org: In computer networking, a wireless access point (WAP) is a device that allows wireless communication devices to connect to a wireless network using Wi-Fi, Bluetooth or related standards. The WAP usually connects to a wired network, and can relay data between the wireless devices (such as computers or printers) and wired devices on the network.

Access points commonly found in home environments provide different features from those found in business or corporate settings. Consumer-level WAPs are often integrated into broadband gateways, and multiple functions can be served from a single device. These functions typically include a switch for wired access, routing functionality, a broadband modem, and a network firewall. Usually an omnidirectional antenna is used, or multiple antennas, a scheme known as antenna diversity. WAPs often have a built-in web interface for their configuration which can be accessed by a web browser.