If you are hosting your WordPress blog in your own server, then you can easily install and customize different WordPress plugins.  You cannot have this capability if you’re using a free WordPress blog hosting.  

However, you can still use WordPress plugins on a free service.  There are available plugins provided by WordPress.com.  You can find these plugins in your dashboard or blog management interface.  Because you’re using a free service, you cannot customize these plugins.  Uploading pre-created WordPress plugins is also disabled in a free hosting service.

If you want to use your own WordPress plug-ins or those you downloaded from other sites, then you need to upgrade to a premium membership.  You can also purchase a web hosting service and install your WordPress blog.  You can now create or customize WordPress plugins in any way you like.

That’s the importance of hosting your WordPress blog.  Plugins can certainly enhance your blog.  Visitors will surely enjoy their stay at your blog if you have many user-oriented plugins.

Creating WordPress plugins however is not easy.  They must be written using PHP language.  So you need to learn this programming language to customize your WordPress plugins.

The easiest way to install a plugin is to download a free copy.  Usually, the file is zipped so you will need a file extraction tool to unzip it.  You can now upload the files to your server.  

Upload the files to the wp-content/plugins directory.  The plugin will now become available on the WordPress Plugins control panel.  Just activate the plugin and it will be automatically installed on your blog.

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