Smart devices connected through protocols such as Z-Wave or Zigbee form what's known as a Mesh Network. To best understand this, it's worth contrasting it with the traditional Wi-Fi setup, as that's doubtless something that most are familiar with.
In a nutshell, whereas in the aforementioned case all devices connect to the router, in a mesh network the devices are interconnected. What that means is that communication doesn't take place directly to and from the central hub only, but, in order to get to the destination device, the message may be bounced along various routes, being relayed by other intervening devices (which, in this context, are referred to as nodes).
In other words, a given message either from the hub to a device, or the reverse, will, instead of making its way directly in the corresponding direction, take the best and shortest route to reach its destination, being received and passed along by other nodes in the network.
The advantages to this are immediately apparent.
For one thing, having the other neighboring devices act as relays for a message en route to a specific device—i.e. having the message hop through them—makes for greater coverage. The hub can this way communicate with devices that would otherwise be out of range.
For another thing, it makes the network more resilient. That is to say, it won't be brought down by a single node failure, as the routing is constantly redone and recalculated so as to take in potential changes.