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"Server" is a colloquialism. As used in casual speech, it's a system that serves something. If you can access anything the system offers remotely, it's serving to you and therefore is a server.

Long before I really got into IT, my mom's laptop had an internet connection it shared. That was a server.

After that but before I setup my first Linux system, my brother and I were sharing files from our desktops. We were both servers (and clients).

A server is just something that serves something.

To add to Toynbee's answer, any computer can become a server if you run some kind of program on it that provides that function. That program runs in the background continuously and waits for other computers, named "clients", to send requests to the "server" computer.

Yes, that includes your own PC, even while you're in the middle of using it. If you were running a website on your PC, i.e. a persistent background application that serves a website, you could type http://localhost/ into your browser and connect to that website. That makes your PC perform the duties of both client and server at the same time. Fun stuff.

It's called "localhost" because, while a "server" is mostly referring to the software on the machine, the "host" refers to the software and hardware together. It's "local" as opposed to "remote" because all computers that aren't the one you're on right now are remote, distant, away.