Dedicated Hosting Service is also known as dedicated server or managed hosting service. This is a type of hosting where the client leases an entire server that is not shared with anyone else. This is way more flexible than shared hosting because the company/organization has full control of the server. They can decide what type of operating system to use, what type of hardware, ect.
Most of the time you can get server administration from the hosting company as an add-on service. Most of the time dedicated servers are located in data centers similar to Colocation Centers. These servers normally have redundant power supplies and HVAC systems. What makes them different from Colocation is that the hardware is owned by the provider and in some cases they provide support. The benefit of using a dedicated server is the high performance, security, email, stability, and control. Because of the high price of dedicated servers most of the time they are only used with high trafficked websites.