There are many factors that would make a planet or moon able to support life, but the most basic factor is the body having liquid water available.
The habitable zone is the orbital region around a star in which a body can possess liquid water on its surface and possibly support life. Liquid water is essential to all life on earth, so the definition of a habitable zone is based on the idea that extraterrestrial life would share that same requirement.
Distance from the star primarily determines the habitable zone, but there are other factors in having liquid water. The reflectivity of the planet or moon, its green-house gases, internal heat of the mass, volcanic activity- these are factors that increase the probability that liquid water may be present on the surface. It's also possible that liquid water is present in some subsurface way to allow for some kind of simple life. It is accepted that Jupiter's moon, Europa has a liquid ocean below the surface. So Europa may be outside of the scientific habitable zone, but it still might support life.
Life on earth is special. Being in the habitable zone and having a large moon and all kinds of other factors have aided in the existence of "Life as we know it." But life-as-we-don't-know-it may very well have evolved here if the factors were different.
Many scientists accept that the habitable zone for our sun, based on an earth-type planet with green house gases can be from 0.9 to 1.5 times the actual distance of earth to the sun. [1.5] is quite a bit.
The changing conditions of the star effect the zone too. Venus may well have been very "habitable" when the sun was younger and Mars (and other outer bodies) may be very "habitable" a few billion years from now as the sun gets older.