It can be many things. Most of the time, it is computers on the same internal network. Being, they do not have to go through the internet in order to connect to each other.

Any computer able to access the internet in the same household is "networked" but they may be on a different workgroup, or the user may not know how to share and see shared folders.

As long as you can see the computer when you hit browse in "add network place" your good.

I'm pretty sure even the workgroup does not matter at that point.