Pain that is felt at a place other than the site of origin (where it started) is called referred pain. Referred pain isn't just pain that has spread a little farther from where it started. It is actually at a distance from the source. It is a very common occurrence in the body.
Muscles, bones, and organs can cause referred pain. Many of the referred pain patterns are well-known. Doctors and therapists are trained to recognize these pain patterns so they won't be fooled into treating the wrong area.
The exact mechanism for referred pain is unknown. Scientists are actively looking for a neurophysiologic explanation. The brain does receive multiple messages at the same time from areas innervated or supplied by the same nerves. It's possible that the central nervous system misinterprets the incoming messages and assumes the problem is coming from the wrong place.
Animal studies have led researchers to wonder if pain messages to the brain cause new pain receptors located in other areas (but still supplied by the affected nerve) to form or turn on. The pattern and size of referral varies from one musculoskeletal pain condition to another. Comparing referred pain patterns from a wide range of causes may shed some light on this phenomenon.
In the case of hip pain caused by a problem in the low back. It could be something as simple as pressure on a spinal nerve that supplies sensation to both places. The central processing functions of the nervous system just misunderstand the messages being sent.