Can refer to diskspace and bandwidth (or data transfer). It means you are not monitored or charged according to the amount of diskspace or bandwidth you use with your hosting plan. The web hosting provider has no defined limitations set. There are physical hardware limits though to what the web server can transfer or store.
While the hosting plan may have unmetered bandwidth and/or diskspace, web hosts can limit their customers by other means. This usually happens in the web hosts Usage Policies and Terms of Service. Web hosts will allow you to utilize disk space and bandwidth in the normal operation of a personal or small business website. If you exceed the threshold of normal operations you will most likely get a warning email either asking you to reduce your usage or move to a hosting plan better suited for your website(s) needs. If you continue to exceed normal operations, within a certain time period (usually 1 or 2 days) your account could be suspended.
An example of a violation of a terms of service could be using 25% or more of system resources for longer than 90 seconds.