Along with your domain name, web hosting is used to make your website accessible to people throughout the world.
A simple analogy to explain what web hosting means is to think of a home located in a street. The web hosting is the actual physical building on the street, the bricks and mortar, windows, doors etc. The domain name is like the address which explains to people where the house is. Without the domain name (address) users would have to use an IP address in order to find it. An IP address is like the coordinates but these are hard for users to remember so we use domain names to direct users to the website hosting location.
Generally, website hosting servers are housed in a data centre. Servers are just computers which usually have been designed and built to serve files cheaply and efficiently.
Web hosting is offered by companies and individuals all over the world and has varying degrees of quality, reliability and pricing. You can find hosting with companies for only a few pounds a month but as with most things in life—you get what you pay for.