Emulated servers, informally referred to as "private servers", are third-party (user-created) offline game servers for online games which do not normally support the use of such servers. This is not to be confused with games which support third-party servers as a normal feature, such as any number of first-person shooters. Playing on emulated servers through the use of Blizzard's WoW client is a breach of the World of Warcraft End-User License Agreement, which requires the user to agree not to connect to unauthorized emulated servers.
Emulated servers are usually created by writing or using custom emulation software which mimics the behavior of an official game server. For this reason, players are experiencing a third party product that may have new or different features and bugs from the official servers. Some servers offer incentives or advantages to play upon them such as custom or new items, access to cheap or free items and equipment, boosted experience rates and drop rates, disabled fall damage, access to inaccessible areas, the ability to go to war with your own faction, ability to go past the level 80 cap (aka: funservers), instant level 80, PVP- only (PVE Quests Disabled, instant 80 and a custom made starting zone with vendors to offer free gear, talent respecs and other things) or even Game Master powers for certain users.
Blizzard has made substantial effort to prevent the authoring, distribution and hosting of third party Game Servers. Responses have included legal action against developers and sites hosting third party servers based on WoW code. Servers not based on WoW code have had no such legal action taken against them. Blizzard has not yet banned any users who connect to these servers, but in some cases, the users of private servers no longer have official server accounts.