One single WNIC (wireless interface?) always operates in one of the following operating modes. The mode sets the main functionality of the wireless link. It is possible for one WNIC to run in two modes at the same time.
Station (STA) infrastructure mode
Any wireless driver is capable of running this mode. Thus it could be called the default mode. Two WNICs in STA mode, cannot connect to one another. They require a third WNIC in AP mode to manage the wireless network! A WNIC in STA mode, connects to a WNIC in AP mode, by sending certain management frames to it. This process is called the authentication and association. After the AP sent the successful association- reply, the STA is part of the wireless network.
This mode is also called managed in the fully deprecated WEXT tools (e.g. iwconfig)
AccessPoint (AP) infrastructure mode
In a managed wireless network the Access Point acts as the Master device. It holds the network together by managing and maintaining lists of associated STAs. It also manages security policies. The network is named after the MAC-Address (BSSID) of the AP. The human readable name for the network, the SSID, is also set by the AP.
Monitor (MON) mode
Monitor mode is a passive-only mode, no frames are transmitted. All incoming packets are handed over to the host computer completely unfiltered. This mode is useful to see what's going on on the network.
With mac80211, it is possible to have a network device in monitor mode in addition to a regular device, this is useful to observe the network whilst using it. However, not all hardware fully supports this as not all hardware can be configured to show all packets while in one of the other operating modes. Monitor mode interfaces always work on a "best effort" basis.
With mac80211, it's also possible to transmit packets in monitor mode, which is known as packet injection. This is useful for applications that wish to implement MLME work in userspace, for example to support nonstandard MAC extensions of IEEE 802.11.
See also: radiotap.
Ad-Hoc (IBSS) mode
The Ad-Hoc mode aka IBBS (Independent Basic Service Set) mode, is used to create a wireless network without the need of having an AP in the network. Each station in an IBSS network is managing the network itself. Ad-Hoc is useful for connecting two or more computers to each other when no (useful) AP is around for this purpose.
Wireless Distribution System (WDS) mode
The Distribution System is the wired uplink connection to an AP. The Wireless Distribution System is the wireless equivalent to it. WDS serves as a wireless communication path between cooperating APs (usually in a single ESS), it can be used instead of cabling. Read iw WDS documentation for details on how to enable this, but also review and consider using 4-address mode.
Mesh interfaces are used to allow multiple devices to communication with each other by establishing intelligent routes between each other dynamically.
In order to achieve mesh portal functionality, you can bridge a mesh interface with a regular Ethernet interface.