A cloud represents the telecommunications provider which we use to route our traffic over a relatively larger geographical location.
Telecommunication service providers(TSPs) already have established lines(telephone, cable..etc) throughout a country. These lines are used by companies to route WAN traffic, from one office to another which could be in another town, another district, another state or even another country. This method is preferred as it would be much more expensive to set a dedicated line to ,lets say another state.(although some big companies employ this as well through TSPs)
What happens in this cloud is routing of packets using certain WAN technologies, such as Frame relay, SONET(ATM), MPLS... etc over devices that are placed in the TSP's location(Routers, switches..etc)