what exactly is it? Is it trying to reduce fat in an area or tone an area? because i always thought it was both.

There is no such thing as "spot reduction". You cannot reduce fat in only one area where you would like it reduced. Fat loss simply doesn't work that way. When you lose fat it will be from all over your body, not just one particular area. Usually, the area that you consider your "trouble spot" where you first put on weight is that last area that will show decrease in fat or "first in, last out" principle.
As far as toning, yes, it is possible to tone muscles in only a certain area of your body if that's the only area you work on with weights. It is usually best, however, to work on the entire body so that everything is kept in proportion and no one area is neglected. It also prevents injuries which can occur when one set of muscles is much weaker than others.