Anyone can at least agree that the Ritz is a five star hotel.  Although hotel star systems are a total mess, some general statements can be made about them as a whole – though there will be many differences within each category.
One-star hotels (and motels / guesthouses) offer basic, no-frills accommodation. The rooms are usually small. A 24-hour front desk, daily housekeeping and private bathroom are not guaranteed. You will have a place to sleep, but not much else.
Two star hotels are one step ahead of one star hotels. You will probably get a 24-hour front desk, daily housekeeping and a private bathroom – possibly with a shower only. Your room will probably have a TV and a telephone. You may receive a continental breakfast and a lobby bar, but this is not guaranteed. These are your basic hotels, though in old cities they can only be old buildings that can not be renovated.
Three-star hotels are what most people consider "standard" hotels. There is a 24-hour reception, room service, daily maid service, private bathrooms (possibly with actual bathrooms), a bar and some sort of restaurants. Your room will likely have a place to sit, such as a desk or table, and Wi-Fi will probably be available. If you want to enjoy the hotel experience, you should not be lower than three stars.
Four-star hotels are like three-star hotels, but nicer. You could have a swimming pool or a gym. The lobby is likely to be large with a bar, café and restaurant. Valet parking, concierge and luggage storage are likely to be available. Fast Internet is as good as guaranteed. Most beautiful hotels have four stars.
Five star hotels are the luxury option. Expect a high-end experience with highly qualified staff. The bar and restaurants will be first class. The beds will be very comfortable. The bathrooms will be big and glamorous. It could even be a spa. These are the hotels where you reenact your movie star fantasies.
Navigating the Stars
Since hotel stars only really tell you which basic criteria a hotel fulfills, you'll have to dig a bit more if you want to find something they really are.
If you want to stay in a nice hotel, it's best to look at user reviews on sites like TripAdvisor. Take everything with a pinch of salt and remember that the type of people who write reviews online may not be looking for the same things you are – but they are a good place to start.
If you want to compare hotels Use a website like Expedia, which has a consistent rating system between countries and hotels and also displays user ratings. You can also usually find the rating criteria or how to assign stars with a little googling. For example, Expedia awards stars.
If a particular facility, such as a hotel bar or in-room safe, is a must for you, contact the hotel directly (or visit the hotel website). Do not assume that you lived in a three-star hotel with a nice bar before all the three-star hotels have a nice bar. Correcting steps by assigning half-stars, silver stars, gold stars, quality ratings and the like to better properties within same category. Keep an eye out for them.
Although the star system of the hotel is chaotic, it is not bad if you understand what the stars really mean. Then you can work with it instead of being surprised when you check in to a dingy 4-star hotel or spend a great stay in a rural 2-star hotel.