Cloud hosting is a server and network infrastructure that uses software to divide a single physical server into multiple virtual servers. Often, these devices are referred to as virtual machines, or VMs. Thus, Cloud Hosting is a network of virtual servers that tap into an underlying network of physical servers. These servers may be used for web hosting, application development, or remote-accessible desktop work environments, and much more. These are containers over the models of Cloud Service delivery, such as, Infrastructure as a service (IaaS), Platform as a service (PaaS), or Software-as-a-Service (SaaS).
Technically, the resources required for your website / application to function are spread out across multiple remote servers and these resources are tapped as they are needed. Since your website isn’t relying on a single server, but instead a network of servers, this network of servers is referred to as the cloud.