That's where a smartphone shares its data by making a wifi signal that other devices can connect to for getting online. The phone becomes a wifi router. You can connect anything to it - desktop, laptop, tablet, other phones, whatever - and share the phone's data connection.
Caveat: Some phone plans may not allow it. If you try to turn it on and your phone says it is not allowed, it's not the phone's fault. It's your service provider not allowing it. Generally the cheaper plans don't allow hotspot/tether.