Hosting is the service that makes web content accessible online. This can include anything from simple web pages to images and large files such as videos or presentations. There are two main features of a hosting account that are important - the disk space and the monthly bandwidth.
The space on a provider's server allocated to an account defines how much content can be uploaded. A free web hosting account, for example, has just enough disk quota for a couple of small or medium websites, while a paid web hosting account usually has a lot more space, so many more websites can be hosted in it. Virtual Private Servers that are used for web hosting purposes also have certain limits and the only limit for a dedicated server is the size of its hard drives.
A file storage hosting account, especially a paid one, may have a disk space limit that exceeds the limit of a hard drive because providers offering this type of hosting have large cloud server systems to be able to provide enough space to their customers. Some web hosting companies like NTC Hosting use a similar system for their shared hosting plans so that each customer can have unlimited space for an unlimited number of websites.
Every time a file is uploaded or downloaded, regardless of the type of hosting, some traffic is generated by the particular account. Since every provider pays for the bandwidth that they use, the monthly traffic that can be generated by a single account is usually limited and each megabyte above the limit is paid additionally. There are providers, though, that offer unlimited traffic, which is sometimes also called unmetered traffic. The slight difference is that with the unlimited traffic, the provider still checks how much traffic has been generated, while with the unmetered traffic they do not check that. The reason is that there may be some limitations with regard to the way the traffic is generated - for example, a web hosting company would expect the traffic to be from websites and they provide the service for this purpose, so when they measure the traffic and see that a lot of it has been used for downloading movies, they may take measures.
The above information is generally valid for paid web and file hosting accounts. There are also providers, which offer unlimited space or traffic, but to be able to do so, they impose certain restrictions on their users. There may be advertisements placed on the pages of a website or there may be counters that make people wait before they are able to download a certain file. This is often quite inconvenient for users, but since there is no limit on how many people can download a certain file, in a way this is unlimited hosting as well.
The term "unlimited hosting" may be used for other hosting features as well. For example, many hosting companies set a limit on how many domain names can be hosted in a single account, how many email accounts or databases can be created, etc. Any of these features can be unlimited depending on the particular plan, so if the provider offers "unlimited email hosting", this may mean that there is no limit on how many email addresses can be created or messages sent, but does not necessarily mean that the space and monthly traffic quotas for this account are also unlimited.
Due to the large number of hosting companies, the increasing number of customers and the spread of the broadband Internet access, the general trend is for most plans to come with unlimited features.