Definition
Eavesdropping is unauthorized listening to communications. On a network, it ranges from a coffee-shop attacker running a packet sniffer on shared Wi-Fi to a nation-state agency tapping fibre-optic cables at internet exchanges. The eavesdropper is passive — they observe, they do not modify — which makes the attack invisible to the participants in the conversation. Active interception, where the attacker also modifies traffic, is called Man-in-the-Middle.
Why VPNs Stop It
Encryption converts the contents of a conversation into ciphertext that the eavesdropper cannot read without the key. They still see that traffic is happening between two endpoints — encryption does not hide the existence of the connection — but the contents are opaque. For most threat models (a hostile coffee shop, a curious hotel network, a logging ISP), making the contents unreadable is sufficient to defeat the attack.
Limits
Eavesdropping is not the only attack. Traffic analysis — observing the size, timing, and pattern of traffic without reading it — can still reveal a great deal: what application is in use, when conversations happen, even sometimes what sentences are being typed. Defeating traffic analysis requires padding, mixing, and delay strategies that VPNs generally do not implement (Tor offers some, with significant performance cost).