What is inetd?
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inetd, and its fairly common xinetd alternative are super daemons. Their role in the networking food chain is as a way of running programs to process network traffic as demand requires. For example, many rsync servers operate from inetd. What this means is that inetd runs in the background as a daemon waiting for connections from clients to the rsync port. It then starts a new copy of rsync for each of these connections, and rsync processes the traffic (and perhaps responds).
Many developers write network servers which are intended to be run by inetd because it simplifies development of the application. inetd handles most of the plumbing for the application.
Please bear in mind that inetd and xinetd are very configurable, and this is only a general description. There is a brief discussion on how to configure inetd and xinetd later in this article. You should refer to the relevant documentation for more information.