Disk space is a measurement of the amount of data that can be stored on a web server at any particular point in time. For example, a web server with 500 GB disk space can store 500 GB of files before there is no room left on the server for new files.
It is very important to have adequate disk space because when there is no storage room left on the server, your web sites cannot be updated any longer. The amount of disk space offered with each web hosting plan differs greatly, depending upon the hosting type, plan size and hosting provider. Having adequate disk space will let you update your sites for months without having to upgrade to a new hosting plan.