Your website or web application consists of information which is stored in files. A website can be built up of and need access to hundreds of different files in order to function. Now all these files need a home. They need to live somewhere. Web hosting is the process of storing all these various files on computers which are able to find send these files over to the user any time.
Your browser will first request and then receive all the files from the web host. There exist basic hosting offering shared computing power and shared bandwidth and you can also purchase a high-end superfast service. A big, frequently changing website with thousands of readers a day will require a serious hosting package with a lot of computing power. On the other hand, your basic static website will not need more than basic shared hosting.