The Promised LAN is a bit of a WAN party, but I would say that "LAN party" can certainly be assumed to include virtual LANs.

I'm even willing to say that a get-together of friends in the same location playing the same online game (perhaps using laptops / handhelds / tablets / smartphones / etc.) still fits the spirit of the LAN party, even though it might technically be over a WAN. (Former LAN game series like Diablo have evolved in this direction, for better or worse, and MMOs were always in this space. It's still a blast to play them with people in the same room.)

The best LAN party is the one that you are part of.

For my definition, I totally don't care whether the server is local or in the cloud. I have a fast enough internet connection that it won't make a difference. (I mean. I would _like_ servers to be local, but I'm not going to refuse a game just because it uses cloud servers.)

The important thing is only that the players are local.