Creating loopback adapter on Windows
We can compare a loopback adapter to a loopback interface on any router. Like the loopback interface on a router is not associated to any physical interface and is always up irrespective of the physical connectivity to the Router, similar a a loopback adapter.
A loopback interface is a virtual interface that resides on a router. It is not connected to any other device. Loopback interfaces are very useful because they will never go down, unless the entire router goes down.
There might be a situation where in you would need to assign an ip address to your laptop and use it for any testing/application. You would not be able to use the ip address assigned to your physical interface useless the physical interface itself is connected to a lan cable. May be a situation wherein the ip address assigned to your physical interface is via dhcp from your Service Provider router and changing the ip on the physical interface is not possible.
How to create a loopback adapter on windows machine :
Click Start > On the search Program and Files type : hdwwiz
or Open cmd and type:hdwwiz it should bring up the Hardware Wizard.
Once you get the add Hardware Wizard window click Next > Click on Install the hardware that I manually select from the list.
You are ready to go.
Goto your network connections ( shortcut type ncpa.cpl in the cmd window), you should see a Local Area Connection 1 or 2 depending on the number of existing connections.
You can disable/enable this adpater as required and right click on properties to assign ip address and use it .