The word “hosting” doesn't describe a single service, but several services that offer different functions to a domain address. Having a website and emails, for example, are two separate services although in the general case they come together, so a lot of people see 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 manages each particular service - the former is a numeric IP address, which defines where the site for the domain address is loaded from, while the second one is an alphanumeric string, which shows the server that manages the e-mails for the domain address. As an example, an A record would be 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 name has and the traffic/message is first directed to that company. When you have custom records on their end, the web browser request or the email will be directed to the correct server. The idea behind employing separate records is that the two services use different web protocols and you could have your website hosted by one company and the e-mails by another.