Let us recap. A horoscope is made up three systems: Houses, Signs, Planets. How do they all function? Why do we need them?
Houses are arenas in life, and we need them because with out them, a birth chart is an abstract map with no tether to the real world. Each house has a function with our day-to-day lives, where as the signs work on a yearly cycle, houses in a natal chart are minute-by-minute interaction in life.
Signs, as mentioned earlier work on a yearly cycle. The astrology we are working with is western, which is based on seasonal changes of the year. Aries start of spring. Libra start of autumn. Capricorn start of winter. Cancer start of summer.
The job of Signs in the natal chart is to represent psychological process, and responses to life. Such as being assertive, or passive.
Finally planets are psychological functions. Example: Mental functions, relationship building, emotional responses and receptivity.
The two systems: Signs, and planets on their own are base foundation of the human personality. On their own, with out the third system: houses. It is an abstract idea. That is why houses are a important role in a chart: To give these abstract ideas a place in daily life. To help demonstrate where, and how those functions and responses are going to demonstrate where they are most prominent.