A backup of a site is a copy of its content, that is kept on a different hosting server and can be restored if something happens. This feature is rather practical, given that you can't know if a script update will not fail or if you won't delete something by accident - a file, a folder, a database entry, etc. When your site is backed up, it may be restored the way it was until the issue appeared, so there won't be any damage, or at least it'll be small, based on the particular situation. Keeping backups on your personal computer is not very feasible, since you would need to do it at least once each day and you can still lose information in case your last backup is not recent enough. In this light, you will have to rely on your hosting provider, so you need to double-check their policy on the backups, given that some companies generate backups once a week, which will do no good if something wrong happens with an Internet site which is being used and updated at all times, like an online store, for example.