http://www.ted.com/talks/seth_priebatsch_the_game_layer_on_top_of_the_world.html

A virtual world is a genre of online community that often takes the form of a computer-based simulated environment, through which users can interact with one another and use and create objects^[1]. Virtual worlds are intended for its users to inhabit and interact, and the term today has become largely synonymous with interactive 3D virtual environments, where the users take the form of avatars visible to others graphically^[2]. These avatars are usually depicted as textual, two-dimensional, or three-dimensional graphical representations, although other forms are possible^[3] (auditory^[4] and touch sensations for example). Some, but not all, virtual worlds allow for multiple users.

Source: Wikipedia