The hostname is an arbitrary identifier for your VPS. You can either choose it to be a Fully Qualified Domain Name (FQDN) or a single word. Please be noted that VPS hostname should be at least 4 characters in length and should not contain any invalid characters such as underscores. 
Please be noted that for our managed VPS plans, you will need to use a Fully Qualified Domain Name (FQDN) and single word cannot be used.