Dedicated hosting provides companies a dedicated server that is not shared with any other customers. The company has complete control over the server and can configure it to suit their needs including choice of operating system, hardware and applications installed on the server.
You also have a dedicated uplink and downlink that is not shared with any other customers along with a dedicated IP.
Dedicated hosting is usually used where a company have specific requirements related to configuration or they require a high level of performance due to traffic.