The term “hosting” doesn't describe only one service, but several services which offer a variety of functions to a domain address. Having a site and e-mails, as an example, are two separate services although in the general case they come together, so most people think of them as one single service. In reality, every domain name has a couple of DNS records called A and MX, which show the server that deals with each particular service - the former is a numeric IP address, which defines where the site for the domain address is loaded from, while the latter is an alphanumeric string, which shows the server that handles the emails for the domain address. For example, an A record is 123.123.123.123 and an MX record would be mx1.domain.com. Every time you open a site or send an e-mail, the global DNS servers are contacted to check the name servers that a domain has and the traffic/message is first forwarded to that company. When you have custom records on their end, the browser request or the e-mail will be directed to the correct server. The idea behind working with separate records is that the two services work with different web protocols and you can have your site hosted by one provider and the emails by another.