A hotspot, also commonly called a WiFi hotspot, is a small area in which one can get connection to the Internet or a LAN without wires, through WiFi. WiFi (also written Wi-Fi) is a wireless technology that allows LANs to be set up without wires between devices. So to have a hotspot, you only need to have a wireless router connected to a broadband Internet line. The router will generate the WiFi signals in a sphere and any WiFi-enabled computer or device in that sphere, which is finally the region of the hotspot, can connect while being inside it. Read more on WiFi.
Hotspots can be found in offices, campuses, cafes, public areas, and even at home. Once you have a wireless router connected to your broadband Internet line, you have a hotspot. The closer you are to the source (router), the better the connection is. Once you are out of the hotspot, delimited by the WiFi network reach, you are disconnected. This is one limitation of WiFi – it has a limited range or about 100 feet at most. This range also depends on the strength of the router signals. WiFi can penetrate concrete walls and other structures, but the signal strength definitely decreases.
Most hotspots are free, but not all are open to the public. You can have unrestricted and free hotspots in public places like garden or outside cafes etc. But most hotspots, private ones, while not being restricted by premises (WiFi passes through walls), have security and authentication features.
In order to connect to a private WiFi hotspot, you need a code called a WEP key. This authenticates you into the network. Some more restrictive hotspots impose passwords and other restrictions. Some WiFi networks require each machine to be registered through hardware with the router before the first use.