What is a default gateway address?

A default gateway address is only applicable when you need two different networks to communicate with one another, and a router/gateway is added to the system. 

What the gateway address does is reserve an IP address for the gateway/router that will be included as the intermediary and lets the device know that it is there.

Here is an example:

You have two devices on two different networks and you want them to communicate.

Device A Device B
IP: 192.168.1.10
IP: 1.10.2.3 

You include a router between them to establish a connection. The router will need two different IP addresses in order to be able to communicate with both networks. The router's addresses are then given to device A and B so they know who the router is.

Device A Router Device B
IP: 192.168.1.10 IP A: 192.168.1.5 IP: 1.10.2.3
Gateway Address: 192.168.1.5 IP B: 1.10.2.1 Gateway Address: 1.10.2.0
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