An Android Virtual Device (AVD) is an emulator configuration that lets you model an actual device by defining hardware and software options to be emulated by the Android Emulator.
The Android SDK includes a virtual mobile device emulator that runs on your computer. The emulator lets you prototype, develop and test Android applications without using a physical device.
In emulator you can check your UI(User Interface), functionality but many applications not supported by emulator. For example GPS, Phone Calling etc.
Use below steps to create an emulator in eclipse
1. Go to the Window menu and choose Android Virtual Device Manager
2. If you are beginner user or first android application user then create a new avd from click in New button
3. Now fill all requirement and click Ok button.
4. Choose your device name and launch your emulator.