A wireless security camera is typically a small, inconspicuous battery-powered video camera that, instead of recording images internally, transmits the signal wirelessly to a receiving device. The receiver must be within 300 - 500 feet (91 - 152 meters) of the camera, depending on the model. Connecting the receiver to a television will allow remote monitoring of the video signal. Connecting it to a VCR or DVR will allow recording of the signal for later viewing or archiving.
There are many feature variations on wireless security cameras to suit different applications. In some cases the camera does not need to be inconspicuous, and might be AC-powered. A mother who wants to keep an eye on her sleeping baby while she's in other areas of the house can purchase a wireless security camera that comes with an AC adapter. By placing the camera so that it views the baby's crib, then connecting the receiver to a television in another room, she can watch her baby sleeping soundly with a mere glance at the TV, even while she tends to other things. This is particularly handy in a two-story house where a physical check means climbing stairs repeatedly.
Other situations, however, call for a more discreet camera that will record in secret.
Though most people are decent, news reports of abusive "caretakers" caught on film by nanny cams or spy cameras have shocked parents. Nanny cams are nothing more than small wireless security cameras. These tiny battery-operated cameras, no bigger than a coin, can be hidden anywhere in the house. Instead of being monitored live, the signal can be recorded to a VCR or DVR for later viewing.
Alternately, there are internet wireless security cameras that will allow you to remotely monitor the camera's video over the internet. The camera transfers the signal via your existing wireless network router or LAN adapter. It is sent to a specific IP address. By entering this IP address in a browser window, you can watch and listen in from anywhere. Software might also include manipulation of the camera, where panning, tilting or zooming is possible.
Internet wireless security cameras can be used to keep an eye on your business, house, pets, or property, and are especially handy for vacationing. By logging on with a laptop, for example, you can take a quick peek back home to make sure everything is okay. The signal can also be recorded to the hard drive. Some cameras are motion-activated, remaining off unless there is movement, at which time the camera not only activates but can send you an email notification or a text message.
Wireless security cameras can be used for countless purposes including overlooking the front porch, driveway or other areas of personal or business property. They can be used to monitor employees, children, or to discourage theft and vandalism. They can be used to protect, spy, guard or invade, and unfortunately unscrupulous uses are also not uncommon.
Security cameras installed around properties are a known deterrent to crime. Some companies even sell fake security cameras for those on a budget. Many come complete with a red LED flashing light and panning motions to imitate the real thing.
From the very expensive to the relatively cheap, with the wide variety of wireless security cameras available today, there is a system ready to serve your needs and budget, whatever your requirements.

Sources: http://www.wisegeek.com/what-is-a-wireless-security-camera.htm