A peering connection can be made between your own VPCs or with a VPC in another AWS account, as long as it is in the same region.
If you have instances in VPC A, they wouldn’t be able to communicate with instances in VPC B or C unless you set up a peering connection. Peering is a one-to-one relationship; a VPC can have multiple peering connections to other VPCs, but transitive peering is not supported. In other words, VPC A can connect to B and C in the above diagram, but C cannot communicate with B unless directly paired.
Additionally, VPCs with overlapping CIDRs cannot be paired. In the diagram, all VPCs have different IP ranges. If they have the same IP ranges, they wouldn’t be able to pair.