I googled for answer of my question but I din't find any good results.I have done the virtualization of 32 , 64 bit OSes.I want to ask : Is it possible to have virtualization for 16bit CPU, 16bit OS? If yes - can we do it on this generation machines ? If No - why not? Thank you for help in advance .
Virtualization is the process of making a guest operating system "see the world" as if it was running on their own, private hardware.
As that, it has been around forever. For example, most MSDOS software still runs on Windows – simply because there has been a MSDOS virtualization layer that made these applications run, even though they did not have access to things like the keyboard controller at its physical hardware address, or could directly write to the memory of an ISA-attached graphics card.
So yes, that is possible, and is still done. It's especially simple, since the hardware to be emulated was simpler.
You mentioned that you're on Mac OS. That's already pretty vintage! OS X was released in 2001, so you probably have a lot of experience with emulating obsolete hardware.
Looking back at the history of Mac OS, it used to be run on PowerPCs, before Apple switched to x86-based computers around 2002/2003 (IIRC). But before, Apple's environment was Motorola 68k-based, which also is a hybrid 16/32 bit platform, and so, there was a large range of 16bit software to be supported in 32 bit mode.
So, all in all, to answer your literal question:
Is it possible to have virtualization for 16bit CPU, 16bit OS
Yes, it's possible, it's done a lot, and it's not very hard to even emulate complete machines.