If referring to a hard disk, this is files having data that isn't in contiguous areas of the drive. While that's not necessarily the best situation, neither is it always something you need to be concerned about. Do a search for "fragmentation" at my search pages for more on that.
In networking, this refers to breaking up (and ultimately reassembling) data packets as they pass through different networks. Obviously a data packet has to have some fixed size, and different systems have different limits: Ethernet can have at most 1,500 bytes, Token Ring is 4,464 and ATM is a miserly 53 bytes. But just because something CAN use X number of bytes doesn't mean that it will. Larger packet sizes are efficient if you have no errors and don't need to retransmit packets; smaller payloads are better if there is packet loss.
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