“Localhost” refers to the local computer in which a program is running. For example, if you are running a web browser on your computer, then in such a situation, your computer will be considered a “localhost.” By the way, there is no need to specify it when you are using a single computer, whereas localhost needs to be defined where you have to run programs on multiple computers.
For example, a network administrator may use his local machine to start a Web Server and a remote access program in another system. These programs run on computers that are different from localhost.
In the example above, both non-local computers are defined using their IP addresses. At the same time, this local machine is defined based on “localhost”, which also provides it with an IP address 127.0.0.1. It is considered a “loopback” address because the information it is sent is routed back to the local machine.
Localhost is most commonly used in Web scripting languages such as PHP and ASP when it is defined which code should run in which server or where the database is located.