In a nutshell (think pistachio), shared web hosting is a service that   lets you host your websites on a web server with a whole bunch of other   web sites. Your web site shares the web server's hardware and software.   As long as your web site doesn't need all of the server's resources,   this is the cheapest option for you because you are sharing the costs   with many other people. Wikipedia answers the question of 
what is shared web hosting by saying: "Each site "sits" on its own partition, or section/place on   the server to keep it separate from other sites. This is generally the   most economical option for hosting as many people share the overall cost   of server maintenance."