V-LAN Switch
A virtual LAN, commonly known as a VLAN, is a group of hosts with a common set of requirements that communicate as if they were attached to the Broadcast domain, regardless of their physical location. A VLAN has the same attributes as a physical LAN, but it allows for end stations to be grouped together even if they are not located on the same network switch. Network reconfiguration can be done through software instead of physically relocating devices.
The VLAN trunking protocol (VTP) is the protocol that switches use to communicate among themselves about VLAN configuration.

In the image above, each switch has two VLANs. On the first switch, VLAN A and VLAN B are sent through a single port (trunked) to the router and through another port to the second switch. VLAN C and VLAN D are trunked from the second switch to the first switch, and through the first switch to the router. This trunk can carry traffic from all four VLANs. The trunk link from the first switch to the router can also carry all four VLANs. In fact, this one connection to the router allows the router to appear on all four VLANs, as if it had four different physical ports connected to the switch.
VTP is a Cisco proprietary protocol used in switching environment to reduce the administrative overhead of managing VLANs configuration. VTP Transparent mode actually means that the switch isn’t participating in the VTP domain as Servers and Clients do. (Bear with me here.) Transparent VTP switches don’t synchronize their VTP databases with other VTP speakers. They don’t even advertise their own VLAN information! Therefore, any VLANs created on a Transparent VTP switch will not be advertised to other VTP speakers in the domain, making them locally significant only. VLANs are created to provide the segmentation services traditionally provided by routers in LAN configurations. VLANs address issues such as scalability, security, and network management. Routers in VLAN topologies provide broadcast filtering, security, address summarization, and traffic flow management. By definition, switches may not bridge IP traffic between VLANs as it would violate the integrity of the VLAN broadcast domain.
Early network designers often configured VLANs with the aim of reducing the size of the collision domain in a large single Ethernet segment and thus improving performance. When Ethernet switches made this a non-issue (because each switch port is a collision domain), attention turned to reducing the size of the broadcast domain at the MAC layer. Virtual networks can also serve to restrict access to network resources without regard to physical topology of the network, although the strength of this method remains debatable as VLAN Hopping is a common means of bypassing such security measures .
As a CCNA and CCNP candidate, you know how and why to configure static VLANs. Static VLANs can be a powerful tool for reducing unnecessary broadcast and multicast traffic, but if hosts are moved from one switch port to another, you’ve got to make those changes manually on the switch. With Dynamic VLANs, the changes are made - how else? - dynamically. The actual configuration of dynamic VLANs is out of the scope of the BCMSN exam, but as a CCNP candidate you need to know the basics of VMPS - a VLAN Membership Policy Server.
For more details, CliCk hErE

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