Multiplexing is a technique that can simplify your wiring. In traditional systems, the wires run from each switch to the device they power. In a multiplexed system, a module containing at least one microprocessor consolidates inputs and outputs for an area of the vehicle. With more and more devices in vehicles each year, multiplexing is necessary to keep the wiring from getting out of control. In a multiplexed system, a module containing at least one microprocessor consolidates inputs and outputs for an area of the vehicle.
For instance, vehicles that have lots of controls on the door may have a driver's-door module. Some vehicles have power-windows, power-mirrors, power-locks and even power-seat controls on the door. It would be impractical to run the thick bundle of wires that would come from a system like this out of the door. Instead, the driver's-door module monitors all of the switches.
Here's how it works: If the driver presses his window switch, the door module closes a relay that provides power to the window motor. If the driver presses the switch to adjust the passenger-side mirror, the driver's door module sends a packet of data onto the communication bus of the car. This packet tells a different module to energize one of the power-mirror motors. In this way, most of the signals that leave the driver's door are consolidated onto the two wires that form the communication bus.
Nice, Karim. “How Car Computers Work.” howstuffworks.com.