Title says it all, an example would be much appreciated as well.
Not a standard term, I think.
A VPN client could be installed in your browser, and handle only traffic from that browser. Or the VPN client could be installed in your operating system, and thus be a gateway where all internet traffic from any source goes through the VPN. In that second case, usually the VPN client creates a fake (virtual) network device, and the OS uses that device to do all internet access. The virtual device applies encryption and encapsulation, and sends the traffic to the real network device, which sends it out to the LAN.
Similar is true for Tor/onion. You could use just Tor Browser, or install an onion gateway that sends all system traffic through the Tor/onion network.