Homesteading (AKA "smallholding" or "crofting") is a style of living designed around self-sufficient agriculture, resource production, and craft work. A homestead in this sense is essentially an off-the-grid farm, where the food production, capture of energy and water, and creation of home goods are the main or entire support system of the inhabitants.
Many contemporary homesteaders use solar and wind energy, and collect precipitation in rain barrels for later reuse. They almost certainly grow vegetables and fruits on the premises, and many keep livestock such as chickens or goats for renewable food resources like eggs and milk.
In some places, particularly areas once controlled by the British Empire, a homestead is simply a household containing an extended family.