What is a USB Host Device?
A host device is a computing device into which you can plug a peripheral.  

Some micros can be either a host or a peripheral.  Using the mouse as an example:  If your micro is emulating a mouse and plugged into a computer, it is a peripheral.  If your micro is accepting input from a mouse (and presumably acting on it in some way), then your micro is a host device, capable of hosting a plugged in peripheral.  

Hopefully this makes sense.