Quoting from the American Thread Company booklet (that I inherited from my MIL):
"Crochet Hooks used differ in size according to the material and object to be worked. The largest, usually of Composition, Bone, Ivory or Wood are used for the heavier kind of work in wool or heavy cotton, steel hooks are preferred for finer types of Crochet in cotton. The Afghan needle is longer than usual and is the same thickness throughout."
At the right are 4 crochet hooks. The top 2 are size 5; the other 2 are size 7. The first and third ones are steel.
For US sizing, steel hooks start out with size 00 (3.50 mm) and decrease in size as the number hook increases. A size 5 steel hook (1.90 mm) is larger than a size 7 steel hook (1.65 mm).
Non-steel hooks increase in size as the hook number increases. In US usage, these hooks are often also referred to by letters (size 7 being an exception to the rule). A size 5 or F hook (3.75 mm) is smaller than a size 7 hook (4.50 mm). (These numbers correspond exactly to knitting needle sizes. Both size 5 hooks and size 5 knitting needles are 3.75 mm around.)
To make matters even more confusing, a size 2 steel hook is the same as a size 1 or B hook (2.25 mm). A size 0 steel hook is the same as a size 3 or D hook (3.25 mm). So, be forewarned. (UK sizing is also different than US sizing.) Here is a link on US sizing.
For me, I use hook size suggestions as guidelines. I make several chain stitches with the suggested hook. If the thread/yarn is difficult to pull through the chain st, I switch to a larger hook. If the chain stitches look big and holey, I switch to a smaller hook. (Further, if I would use a size 7 knitting needle for a particular yarn, I'd probably also use a size 7 hook.)
Finally, here is what an Afghan hook/needle looks like and how it is used. (The picture and words are from the American Thread Company booklet.)