A hillfort refers to a circular bank and ditch feature that was made in Iron Age times and usually surrounds the top of a hill.
It looks like a fort designed to defend from attack, and this is why early investigators called them hill forts.
In more recent times, it has been thought that they were more symbols of power than forts. They were very easy to see, and so might have served in the same way that palaces did in later times. They might also have served as communal grain stores, for grain was the most precious thing a tribe had, and protecting it would have been their first priority.
It would have been hard to live in these areas because the farming was all done on land lower down. They might simply have been good places to retreat to if a local tribe attacked.
If you are wondering why no one is really certain, it is because the hill forts were abandoned in the middle of Iron Age times, and no one knows why. So, apart from a few which were hastily reoccupied when the Romans attacked, they were all disused by Roman times, and as they were mostly built in wood, there is very little left to tell us what buildings were inside the forts and how many people might have lived there.