What is virtual DOM? How does it actually work?

React describes the UI as a structure in memory.

When state or props change, the component is logically rendered again, and during reconciliation React works out which changes to apply to the real DOM.

function Counter() {
  const [count, setCount] =
    useState(0);

  return <h1>{count}</h1>;
}

After:

setCount(1);

React doesn't have to build the whole page again. It updates what actually changed.

To be precise:
Don't say “the Virtual DOM is always faster than the DOM”. The main benefit is the declarative UI model and managed updates.