WPA is a "light" version of the 802.11i protocol, which relies on authentication protocols and a strong encryption algorithm: TKIP (Temporary Key Integrity Protocol). TKIP generates keys randomly and can alter an encryption key several times a second, for greater security.
WPA requires installing an authentication server (most commonly a RADIUS server), which identifies users on a network and sets their access privileges. Nonetheless, small networks can make use of a simpler version of WPA, called WPA-PSK, by deploying the same encryption key on all devices, which eliminates the need for a RADIUS server.
WPA (in its first build) only supports networks in infrastructure mode, which means it cannot be used to secure wireless peer-to-peer networks (ad hoc mode).