A hookah is a waterpipe that is used for smoking shisha tobacco. Hookahs come in many shapes, sizes, and styles, but the basic parts and functionality will be the same across all hookahs. When smoking a hookah the smoke itself is generated at the top of your hookah in the hookah bowl, passes down through the hookah stem in to the base where it is filtered through the water, and then passes back up through the hose that you are inhaling on.
Shisha is the tobacco that is smoked in a hookah. Shisha tobacco differs from dry cigarette or pipe tobacco in that it is a wet tobacco that is soaked in a combination of glycerin, molasses or honey, and flavoring. This combination of ingredients allows for the flavoring juices to soak in to the tobacco leaves providing robust flavors and, in addition, this allows the tobacco to smoked over a longer period of time than dry tobacco as it is being slowly cooked as opposed to being burned or combusted.