Shared web hosting is the cheapest form of hosting available. In a nutshell, the web host decides how many "tenants" can comfortably "share" the space on a single physical server*. And just like people sharing an apartment block, life and resources can get stressed!
*A server is a computer that has special software on it to do special things - so in this case, the server would be a computer that can serve up webpages.
Think of it like an Apartment Block
It's like renting an apartment in a block - except what you're getting is a folder, with a predefined amount of space, on a server.
Just like an apartment block, you have to share the resources with everyone else
So if you happen to be sharing with a very busy website that's devouring the server's processing power then you've got to make do with what's left. On a shared server all you get to keep is your "space", the rest - operating system, processing power, memory and so on is shared. That's why shared web hosting is cheap. The next level up is a Virtual Private Server or VPS.