In wireless networking, various techniques and configurations are used to ensure fast, high-quality, and secure connections. Different operating types suit different setups. It can be difficult to choose the right authentication method. The available encryption methods have different advantages and pitfalls.
Basically, wireless networks can be classified into two network modes:
Managed networks have a managing element: the access point. In this mode (also referred to as infrastructure mode), all connections of the WLAN stations in the network run through the access point, which may also serve as a connection to an ethernet.
Ad-hoc networks do not have an access point. The stations communicate directly with each other, therefore an ad-hoc network is usually faster than a managed network. However, the transmission range and number of participating stations are greatly limited in ad-hoc networks. They also do not support WPA authentication. Therefore, an access point is usually used. It is even possible to use a WLAN card as an access point. Some cards support this functionality.
In master mode your network card is used as the access point. It works only if your WLAN card supports this mode. Find out the details of your WLAN card on http://linux-wless.passys.nl.