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Thane of the hold is a title bestowed after completing quests for a Jarl and his associates and by gaining respectability from the residents of the hold. The title itself is a person of great honor for that particular city, people will admire you in the streets and you may even have the guards turn a blind eye to crimes committed. A prerequisite to the title is that you must own property in that particular hold capital if there is a house to purchase; And help three to five citizens of that hold.
After slaying the first dragon in the main quest line, Dragon Rising, Jarl Balgruuf the Greater pronounces you Thane of Whiterun as a reward, as well as the services of Lydia your first housecarl.