Although running a windowing environment is a drain on the computing power of a workstation, modern workstations (and even PCs) have become powerful enough to service a large number of windows simultaneously. Taking this one logical step further, it is even possible to have one workstation service a number of X Windows on different terminals or workstations simultaneously.
A terminal engineered to run the X Window System remotely from the Unix workstation is called an X terminal or X station. X terminals have become very popular as a way to provide the benefits of a graphics and windowed display to multiple users without incurring the expense and management of multiple, full-powered workstations. While these terminals contain rather substantial computing power themselves, they are still terminals in that they cannot function without the central workstation providing the terminal with operating system, programs, memory, and CPU cycles. The CPU within the X terminal is used only to draw the screen, but because drawing a high resolution color screen is a computationally intensive chore, this lightens considerably the load on the central computer.
The X terminal runs an X server, which in turn receives the drawing commands and transmits the user's key and mouse commands back to the applications. The X terminal is connected to the central computer via a TCP/IP network, usually ethernet. This means each X station has an independent hostname and IP address and will place some amount of increased traffic on the communications network. On a more technical level, an X terminal has a fast graphics processor and enough memory (typically several Megabytes) to support all of a single user's windows. To save memory and expense, X stations may have fewer colors than the console, usually 16 rather than 256. X terminals can even be a DOS computer, some of which run a very nice X Windows System. In those cases, the computer can have its own DOS existence (if you call that living).