Reseller hosting refers to hosting service in which the service provider is actually an account holder in a shared hosting plan, whereby they splits up their allotted diskspace and bandwidth to resell web hosting.
It implies therefore that in reseller hosting, one does not own a grassroots web hosting set up.
Reseller hosts do not generally hold responsibility for maintaining and running host server. That job is catered to by actual owner of host server who sells hosting space for reseller hosting.
It is possible that in a single host server, several reseller hosting plans are running concurrently, each of which catering further to any number of websites down the line.
Depending on requirement, reseller hosting can be of 2 types - multi-domain account and branded hosting business.
A webmaster may require a network of websites under different domain names to serve different business plans, but all are hosted under a common reseller hosting account. It is not uncommon to find a web business going more than one website for different purposes.
A company owns different domain names for assorted departments, all linked to a single reseller hosting account. For example, a travel company requires different websites for different travel destinations.
A big company allots different websites for different brands it owns, like a car company that has several branded cars under its fold. Reseller hosting is a good choice for it.