The term "dedicated server" is used to describe when a client leases an entire web server that is not shared with any other clients. This allows the client the ability to have more control over the server, such as operating system choice, control panel choice and administrative control over the server. The client can still host multiple web sites on this server, only no other clients web sites will be hosted on the same machine.
The web hosting company that leases the server to the client maintains the network connections and manages the power sources to the server by providing redundant back-up power sources. Hosting companies also offer some form of server management as an additional service. This provides the client with a knowledgeable server administrator to help with the duties of server administration.
Leasing a dedicated server will vary in price based on the processor, operating system, hard drive size(disk storage) and how much bandwidth you are alloted. A dedicated server is the most expensive option compared to shared hosting or a virtual dedicated server, but allows you the greatest flexibility and performance of any of the options.