Online faxing — also called internet fax, e-fax, or virtual fax — lets you send documents to any fax number using the internet instead of a physical fax machine and phone line. The terms are all interchangeable; they describe the same thing.
You upload a document (PDF, Word doc, or photo), the service converts it into the format a fax machine understands and transmits it over the internet, and the recipient receives it on their physical fax machine — or digitally if they use an online service too.
The recipient doesn't need any special equipment or software.
What does vary dramatically across services is what they require you to do before sending: some let you fax online without an account, while others make you sign up, pick a plan, verify your email, and enter payment details before you can send your first page.