Host web and App web come into picture when we are developing and hosting the SharePoint Add-in. The Host web itself suggest that it is allowing to host anything within it. So the SharePoint site where the Add-in is basically installed is called as Host Web while the URL of the SharePoint add-in is called as App Web.

HostWeb is the URL where the App is installed. AppWeb is the App URL which is created on installing an App. An App is basically a WEB

All your SharePoint components should be Deployed in a separate SharePoint site, called as the App Web. The Host Web is nothing but the SharePoint site where the App is actually Installed.