Well, others have given a good definition of 'localhost'.
It is kind of a defacto for the text representation of the local IP 127.0.0.1.
You can have 'betterhost', 'otherhost', 'someotherhost' if you use a DNS server that can translate it to working IP addresses, OR by modifying the host file. But that's another topic for another day or better day. :P