IP address
An IP address serves two principal functions. It identifies the host, or more specifically its network interface, and it provides the location of the host in the network, and thus the capability of establishing a path to that host. Its role has been characterized as follows: "A name indicates what we seek. An address indicates where it is. A route indicates how to get there."
The header of each IP packet contains the IP address of the sending host, and that of the destination host.
Internet Protocol
IP addressing entails the assignment of IP addresses and associated parameters to host interfaces. The address space is divided into subnetworks, involving the designation of network prefixes. IP routing is performed by all hosts, as well as routers, whose main function is to transport packets across network boundaries. Routers communicate with one another via specially designed routing protocols, either interior gateway protocols or exterior gateway protocols, as needed for the topology of the network.