Generally, a configuration is the arrangement - or the process of making the arrangement - of the parts that make up a whole.
1) In computers and computer networks, a configuration often refers to the specific hardware and software details in terms of devices attached, capacity or capability, and exactly what the system is made up of.
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2) In networks, a configuration often means the network topology.
3) In installing hardware and software, configuration is sometimes the methodical process of defining options that are provided.
Also see configuration management (CM).