Meaning – The term encapsulation, refers to the process by which a lower-layer protocol receives data from a higher-layer protocol and then places the data into the data portion of its frame.
In the context of networking, encapsulation is the process of enclosing one type of packet using another type of packet. When encapsulation occurs at the lower levels of an open system interconnection, the process is referred to as framing.
In order to achieve the encapsulation in an OSI, the data linklayer, or layer 2 is the one that is responsible for framing the data for transmission over the physical medium.
Example of usage – “An Ethernet frame that encapsulates an Internet Protocol (IP) packet, which itself encapsulates a Transmission Control Protocol (TCP) packet, which then encapsulates the actual data being transmitted over the network.”