Catering is simply explained- for example, you have a wedding that you are planning, but you do not want to host the reception in a restaurant or hotel where there are kitchen services available. But instead, you are thinking of a picturesque event location like a park, or beach, or perhaps at an event hall that you are renting, or some other beautiful event space that offers the room to rent, but not the food, beverages, or staffing required. This is when you would need to hire a caterer to bring those items that you want to offer to your guests on-site.
The word Catering means (catering from cater - "to supply provisions") - the provision of services for servicing events in remote (from places of public catering) places.
Catering is not limited to just preparing the food and beverages, but also entails other services rendered, like serving the food to the guests, setting the tables up for the event, and having staff handle any guest requests for more food or drinks, etc.