For the ideal functioning of the body, there needs to be an ideal optimum constant environment in the body, which is suitable for all the enzymes to work . Homeostasis is the mechanism of maintenance of the internal body environment, when there are fluctuations in the external environment. For you to understand homeostasis we need to know what do we mean by the internal environment, this would include blood glucose levels, water concentration and body temperature. Any changes in the external environment can put a direct impact on these internal conditions, hence homeostasis exists to keep things at constant.
Homeostasis is important for the normal chemical and nervous coordination. All the reactions are catalysed by enzymes that require an optimum environment for working. Hence the whole metabolism of the body relies on the ideal homeostatic maintenance. All the systems of the body are linked together in keeping ideal conditions sustained. The normal homeostatic standards are set up in the brain and any fluctuation is reported and resulted into a proper response.
An example for understanding can be taken , for example maintenance of blood glucose level. If the sugar level in the blood goes too high the homeostatic machinery will become active to bring it back to normal , now we need to look HOW? So there is a hormone called insulin , when the blood glucose level increases the pancreas secrete this hormone . the hormone when released into the blood initiates certain responses that tend to bring the glucose level n=back to normal. For example the cells will absorb more glucose from the blood, the liver will convert the excess of glucose into glycogen ,and some more activities. All of these responses will bring the glucose back to its normal level.
Similarly if there is a condition where the glucoses level has decreased too much , a hormone called glucagon is released from the pancreas , which initiates certain responses that tends to increase the blood glucose level, that includes the conversion of storage glycogen in the liver back to glucose.
So like this all the other levels of the blood are controlled for normal functioning. Note that if the homeostatic mechanisms do not work normally they can lead to certain diseases and death too in extreme cases.