Simulations use mathmatical models to predict the behaviour of a circuit. The wikipediaWikipedia article is a good starting point to learn more. This tag should be used for questions related to circuit simulation tools (software).
Questions specifically about the popular SPICE simulator --, or one of its many descendant software --, should also be tagged spice.
Typically circuits are described to the simulator in either a text file "SPICE netlist"(like a SPICE netlist) or as a graphical schematics.