Your Web site is hosted by a web hosting provider by placing it on a computer (also called a "server", since it "serves" content up to Web surfers,) which is designed specifically to host Web sites.
Servers are directly connected to the Internet backbone on fast communication links (much like phone lines, only these lines are bigger, and carry digital data, instead of voices).
Your Web site will reside on one of the servers at a web host's facility, yet you can view it and work on it from your own PC. This is virtually like having a computer of your own, therefore the term Virtual Web Hosting.