The disk is classed as virtual due to the way it is mapped to the physical storage capacity it represents. In most virtual storage systems a meta-data mapping table is held which translates the incoming (virtual) disk identifier, and LBA (logical block addressing) to a physical disk identifier and LBA.
The virtualization granularity depends on the implementation. Some virtualized systems simply provide what may be thought of more as disk aggregation and so the granularity is a physical disk itself. True virtualization systems actually break down the physical disks into smaller 'chunks' or extents. This can provide a performance benefit by spreading a single virtual disk across many physical disks - therefore getting more concurrent access than a non-virtualized system.