What is a hostname?

The hostname is the alias for the box on the (either global or local) network. If you call it "fedora-box", the box will be called "fedora-box" and is able to be addressed with this name on a network.

From Wikipedia:

A hostname is a label that is assigned to a device connected to a computer network and that is used to identify the device in various forms of electronic communication such as the World Wide Web, e-mail or Usenet.

Fedora itself does not greatly care what you put as the system's hostname. It does matter in the larger context of your LAN and the Internet though, as giving your system a hostname used by another system will impede your ability to access it.