First of all, what does Schengen mean ?
Schengen is an agreement that have been signed in Schengen (a small village in the south of Luxembourg) in 1985, then a convention signed in 1990 that allows the free transfer of capitals, goods and people between 26 European countries.
So Schengen brings together 26 countries, out of 56 in Europe, which are:
A couple of other European countries are currently in negotiation to join the Schengen area; Croatia, Bulgaria, Romania and Cyprus.
Between the Schengen states, it is possible de move freely because there are no real border controls.
From experience I would like to let you know that it is still possible de travel to Croatia with a Schengen visa.
Note: if you get a Schengen visa from a specific state, it is highly recommended to make your first entrance by that country (to validate your visa). Afterwards, you can go from one country to another, while respecting the length of your visa.
If you have any question about this topic, I’ll be happy to help!