To set up an ad-hoc wireless network, each wireless adapter must be configured for ad-hoc mode versus the alternative infrastructure mode. In addition, all wireless adapters on the ad-hoc network must use the same SSID and the same channel number.
An ad-hoc network tends to feature a small group of devices all in very close proximity to each other. Performance suffers as the number of devices grows, and a large ad-hoc network quickly becomes difficult to manage. Ad-hoc networks cannot bridge to wired LANs or to the Internet without installing a special-purpose gateway.
Ad hoc networks make sense when needing to build a small, all-wireless LAN quickly and spend the minimum amount of money on equipment. Ad hoc networks also work well as a temporary fallback mechanism if normally-available infrastructure mode gear (access points or routers) stop functioning.