Artificial neural networks are composed of interconnecting artificial neurons (programming constructs that mimic the properties of biological neurons).
Artificial neural networks may either be used to gain an understanding of biological neural networks, or for solving artificial intelligence problems without necessarily creating a model of a real biological system.
The real, biological nervous system is highly complex: artificial neural network algorithms attempt to abstract this complexity and focus on what may hypothetically matter most from an information processing point of view.
Here is a fantastic animation on Perceptrons in the Neural Networks
Animation of Perceptron