A firewall is a device that is installed between the internal network and the external network (internet) to filter all incoming and outgoing traffic or data. This is also known as ‘packet filtering’. A system administrator programs certain rules in a firewall which are used to evaluate incoming and outgoing data. A firewall performs two major roles:

Provides defense against external threats by refusing unauthorized connections to the router from potential attackers such as hackers.

It also protects the network infrastructure from within. In other words, it blocks outgoing connections from the router. It mitigates the spread of viruses, keyloggers, or malware that have sneaked past the router and on the network. Such malicious software might transmit confidential data back to the hacker such as passwords. Only a firewall is able to prevent them from doing so by inhibiting their connection.
For more info: firewall and network security

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