Although tethering and hotspot offer the same results, the way that they operate is slightly different. With a mobile hotspot, this typically involves a network provider that works with a hardware device and allows users to connect to the internet with the hardware device acting as a router. With a hotspot, the connection is wireless.
On the other hand, tethering, which can be established either through a USB cable, Bluetooth or Wi-Fi involves sharing of internet connection from one device that has internet to another one that does not. It is important to note though that when tethering is done through Wi-Fi, then the device providing the internet connection is acting as a mobile hotspot.