LINUX virtual machine vs Linux virtual terminal

Hello everyone am new in this forum, hope u will welcome me, am a student and Linux beginner, i want clarity on the above mentioned subject.am doing a project at school they asked me to install a Linux virtual machine which i did successfully using oracle virtual box to setup an ubuntu virtual machine , later they asked me to set up the virtual terminal to the local area network, now thats where my confusion is coming from, this word terminal is where am getting the confusion from.

THANKS