Website builders are a type of software that turns visual design elements into HTML / CSS files that browsers can show as a website. Modern website builders are usually bundled in some form with hosting to provide storage & server abilities for those files.
As an analogy, imagine a website is like a physical home. Website builders are a bit like pre-built houses or condominiums with infrastructure & services provided. Usually the land (hosting), address (domain) and services are bundled with the home. There are usually costs & limitations, but also much more convenience compared to building a home from scratch.