There are three essential components for an webcam system. First is the webcam itself and second is a software to operate webcam and process the image captured. The third is computer or server on which the webcam software works.
Webcam (capturing digital image)--------> Software in computer(converting the raw digital image into jpeg format)
----------> Line connection(ethernet or ppp,slip dialup) -----------> ftp ------------> server with destined webpage-----------> On the webpage.