CIDR - Classless Inter-Domain Routing

CIDR stands for Classless Inter-Domain Routing. CIDR was developed in the 1990s as a standard scheme for routing network traffic across the Internet.
Why Use CIDR?

Before CIDR technology was developed, Internet routers managed network traffic based on the class of IP addresses. In this system, the value of an IP address determines its subnetwork for the purposes of routing.
CIDR is an alternative to traditional IP subnetting that organizes IP addresses into subnetworks independent of the value of the addresses themselves. CIDR is also known as supernetting as it effectively allows multiple subnets to be grouped together for network routing.
CIDR Notation
CIDR specifies an IP address range using a combination of an IP address and its associated network mask. CIDR notation uses the following format -
xxx.xxx.xxx.xxx/n
where n is the number of (leftmost) '1' bits in the mask. For example,
192.168.12.0/23
applies the network mask 255.255.254.0 to the 192.168 network, starting at 192.168.12.0. This notation represents the address range 192.168.12.0 - 192.168.13.255. Compared to traditional class-based networking, 192.168.12.0/23 represents an aggregation of the two Class C subnets 192.168.12.0 and 192.168.13.0 each having a subnet mask of 255.255.255.0. In other words,
192.168.12.0/23 = 192.168.12.0/24 + 192.168.13.0/24
Additionally, CIDR supports Internet address allocation and message routing independent of the traditional class of a given IP address range. For example,
10.4.12.0/22
represents the address range 10.4.12.0 - 10.4.15.255 (network mask 255.255.252.0). This allocates the equivalent of four Class C networks within the much larger Class A space.
You will sometimes see CIDR notation used even for non-CIDR networks. In non-CIDR IP subnetting, however, the value of n is restricted to either 8 (Class A), 16 (Class B) or 24 (Class C). Examples:
• 10.0.0.0/8
• 172.16.0.0/16
• 192.168.3.0/24
How CIDR Works
CIDR implementations require certain support be embedded within the network routing protocols. When first implemented on the Internet, the core routing protocols like BGP (Border Gateway Protocol) and OSPF (Open Shortest Path First) were updated to support CIDR. Obsolete or less popular routing protocols may not support CIDR.
CIDR aggregation requires the network segments involved to be contiguous (numerically adjacent) in the address space. CIDR cannot, for example, aggregate 192.168.12.0 and 192.168.15.0 into a single route unless the intermediate .13 and .14 address ranges are included (i.e., the 192.168.12/22 network).
Internet WAN or backbone routers (those that manage traffic between Internet Service Providers) all generally support CIDR to achieve the goal of conserving IP address space. Mainstream consumer routers often do not support CIDR, therefore private networks (including home networks) and even small public networks (LANs) often do not employ it.
source : http://compnetworking.about.com