According to Wikipedia
A web hosting service is a type of Internet hosting service that allows individuals and organizations to make their website accessible via the World Wide Web. Web hosts are companies that provide space on a server owned or leased for use by clients, as well as providing Internet connectivity, typically in a data center. Web hosts can also provide data center space and connectivity to the Internet for other servers located in their data center, called colocation, also known as Housing in Latin America or France.
The scope of web hosting services varies greatly. The most basic is web page and small-scale file hosting, where files can be uploaded via File Transfer Protocol (FTP) or a Web interface. The files are usually delivered to the Web "as is" or with minimal processing. Many Internet service providers (ISPs) offer this service free to subscribers. Individuals and organizations may also obtain Web page hosting from alternative service providers. Personal web site hosting is typically free, advertisement-sponsored, or inexpensive. Business web site hosting often has a higher expense depending upon the size and type of the site.
Single page hosting is generally sufficient for personal web pages. A complex site calls for a more comprehensive package that provides database support and application development platforms (e.g. PHP, Java, and Ruby on Rails, ColdFusion, or ASP.NET). These facilities allow customers to write or install scripts for applications like forums and content management. Also, Secure Sockets Layer (SSL) is typically used for websites that wish to keep the data transmitted, more secure.
The host may also provide an interface or control panel for managing the Web server and installing scripts, as well as other modules and service applications like e-mail. A web server that does not use a control panel for managing the hosting account, is often referred to as a "headless" server. Some hosts specialize in certain web Apps or services (e.g. e-commerce, blogs, etc.).