Simple definition
VRF Lite separates routing tables on one network device to isolate traffic without requiring an MPLS core.
Purpose and use
VRF Lite separates multiple routing tables on one device without requiring a provider MPLS core.
How does it work?
Each VRF, Virtual Routing and Forwarding, instance has its own routes and interface context, allowing overlapping address plans in separate contexts.
Example and verification
Specify the VRF when testing connectivity: a route in the global table may be absent from the relevant customer's table.
Points to watch
Logical route separation provides no encryption. Incorrect interface assignment or route import can also undermine intended isolation.
In short
VRF Lite creates separate forwarding domains; any communication between them should be explicit and controlled.