What Does Virtual Device Mean?
A virtual device, in operating systems like Unix or Linux, refers to a device file that has no associated hardware. This type of file can be created with the mknod command, for instance. A virtual device mimics a physical hardware device when, in fact, it exists only in software form. Therefore, it makes the system believe that a particular hardware exists when it really does not.
A virtual device is also known as a virtual peripheral.
Techopedia Explains Virtual Device
As the name suggests, a virtual device is present as an abstract form, that is, without any concrete hardware accompanying it. Virtual devices are generally used to fix an error in the operating system. For example, a bug or virus can be detected by supposing an external device is monitoring it. Initially, the command mknod was used to produce the character and block devices that populate the "/dev/" directory. But now the udev device manager automatically creates and destroys device nodes in the virtual file system. The supposed hardware (virtual device) is detected by the kernel, but, actually, it is only a file/directory.