Bandwidth is the amount of data transfer that you are allowed to have for a hosting package.
E.g. let’s say you have a web page that is 48 KB (Kilobytes) in size. Each time a user visits your site and goes to that page, he downloads 48 KB of information to his browser. Conversely, if a hundred users view that page once each, there will have been a total of 4800 KB of data transferred. You do the math – if you have a graphics-intensive webpage, or a very busy website, your bandwidth quota can quickly run out.
Often, webhosts will advertise “unlimited bandwidth” as part of their hosting plans, and you may be tempted to go for it. But, quite frankly, there is no such thing! Your web-hosting account will only be allowed to serve web pages up to its total allocated, or reasonable, resources, since all hosts have limited resources themselves. And if you look closely, you’re bound to find a legal clause somewhere that mentions “reasonable and fair use”, and the like.
However, depending on your web-hosting agreement, you may be allowed to temporarily exceed your bandwidth limit for a hefty premium (i.e. it will cost you extra).