Managed hosting refers to the process of hiring a web hosting provider for a day-to-day management of system hardware, software, and servers. In simpler terms, when you outsource the job of managing your websites, it is called managed hosting.
Suppose, you are hosting an e-commerce website through web-hosting providers, and instead of letting your IT staff update OS packages, implement security patches, update website installations, etc., you ask the hosting provider support team to do this job on your behalf. Then, this agreement regarding the management of your website is called managed hosting.