The term “hosting” doesn't describe one service, but a number of services that offer different functions to a domain address. Having a site and e-mails, for instance, are two independent services although in the general case they come together, so many people consider them as one single service. In reality, every single domain has a couple of DNS records called A and MX, which show the server that handles each particular service - the former is a numeric IP address, which identifies where the website for the domain address is loaded from, while the second one is an alphanumeric string, which shows the server that handles the emails for the domain address. As an example, an A record is 220.127.116.11 and an MX record would be mx1.domain.com. Every time you open a website or send an email, the global DNS servers are contacted to check the name servers that a domain address has and the traffic/message is first directed to that company. When you have custom records on their end, the browser request or the email will then be directed to the correct server. The idea behind using separate records is that the two services work with different web protocols and you may have your site hosted by one company and the emails by another.