Very simply put, the host prepares and serves sweets and tea (and in the case of a formal tea ceremony a meal and sake as well), and the guests receive them.
Naturally there's a whole lot more to it than that.
It's not really a ceremony, but rather a ceremonious way of preparing and drinking tea. "Tea Ceremony" is just what we call it in English. In Japanese it's called "The Way of Tea."
It is a very formal ritual that requires discipline and concentration. To be able to perform the tea cermony flawlessly is a highly admired art in Japan.
Additionally, it is a way of life much like...