A virtual environment is a sandbox for packages. Pip's default behavior is system level. However, packages installed in different virtual environment do not co-mingle. The ideal is for each project to have its own distinct virtual environment.
This is especially important on team projects. The virtual environment provides a means to a standard for packages. Identifying project dependencies and which package versions have already been tested against the code.
It is common to see virtual environments named after the project it represents. The virtual enviromment in this sample will be called venv
.