John, perhaps the following will help. The Internet connection that comes into my house (happens to be a Comcast connection) terminates in a WiFi device sometimes called a "base station" which then broadcasts WiFi signals all through my house.
The way this works, the base station transmitter has a name; in fact I can give it any name I choose, say "Joe". The station, every second or so, then broadcasts a brief message saying, in essence, "Hey, I'm Joe, if you want to connect to me, send me back a message". This message goes all through my house; any one in my house with a laptop will see "Joe" displayed as an available WiFi hot spot.
Now the problem is, Joe's signals have to be strong enough to be receivable anywhere in my house or yard. But, there's no way to make Joe's signals stop at my fence or my lot line. The radio waves spill over into neighbors' yards and houses, getting weaker as they go. So, some of my neighbors see Joe's transmission on their laptops, and I see signals from their base stations, named "Bill" and "Gary" and so on on my laptop.
Now, I don't want my neighbors using Joe, and they don't want me using Bill or Gary. So whenever a laptop tries to communicate back and set up a connection with Joe, the first thing Joe asks is, "What's my password?" If the user of this laptop can't give the right password (which I've chosen and set into Joe), then Joe won't let him set up a connection with him. I've given this password to all the people in my house (and not to my neighbors).
If a neighbor and I were friends, and trusted each other, and if he didn't have a base station and wanted to use mine for a while, he could walk over and ask me for Joe's password, and I might give it to him. Or if I needed some cash to pay my Comcast bill, I might suggest he pay me back for some part of my Comcast bill during the period he's using Joe. But otherwise he'd have to get his own Internet connection and set up his own base station.
Does that clarify anything?