A virtual reel is a list of numbers, larger than the number of stops on a reel, that an RNG maps onto the symbols you see. It lets designers make a symbol much rarer than its single appearance on the reel would suggest.
The idea was patented by Inge Telnaes in 1984. Before it, a physical reel with, say, 22 stops gave every stop the same chance, which limited how large jackpots could be. With a virtual reel, as an illustrative example, 64 numbers might map to 22 stops: blanks and low symbols get several numbers each, the jackpot symbol gets just one.
That is why the reels can look more generous than they are. It is also linked to the near-miss effect: blanks next to high symbols can be given extra weight, so high symbols appear just above or below the line more often than an equal-chance reel would produce.
Online slots use the same principle through weighted reel strips and outcome tables.