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I know in cloud computing, we can easily add VM-instances into a logical sub-network or vice versa. In the real world, however, all the VMs are running on physical machines, and all the physical machines are interconnected via cables and network devices, i.e. routers or switches.

I'am not very clear that what's the topology in a physical network. And how the virtual network set up on these physical devices.

For example, if I want to add a private sub-network in cloud, I could simply execute a add command. The physical network, however, didn't changed at all. So, is that add command operates on a virtual router which is usually a linux host with iptables or operates on a real physical router?

Can anyone show me some network topology diagrams to illustrate the relationship between virtual and real world?

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Usually cloud infrastructures are hierarchy.Here is some topology diagrams. http://www.uml-diagrams.org/network-architecture-diagrams.html

Here is another one: https://support.rightscale.com/12-Guides/Designers_Guide/Cloud_Solution_Architectures/Cloud_Computing_System_Architecture_Diagrams/

I don't have that much experience on cloud networking. A router could come on different layers. You could have a linux operating system running on a server which it's only job is routing. It is possible to have router designed and manufactured in hardware and configure it to perform what you want. (The first is a little bit slower)