Android emulator doesn't use Windows host file?
I got this article, it explains how to edit the hosts file. I don't know if it works yet, bit it might help.
BROKEN (Feb 2015) - http://www.bradcurtis.com/2011/02/13/hosts-file-google-android-emulator/ (Leaving it in case it recovers)
If I'm not wrong, they moved the link here, I'm not sure if it's the same article, I haven't touched this since may 2012. http://www.bradcurtis.com/hosts-files-and-the-google-android-emulator/ (Mirror Link https://web.archive.org/web/20180615121728/http://www.bradcurtis.com/hosts-files-and-the-google-android-emulator/)
EDIT: Adds a new link that works and talks about the ame issue (Not sure if it's the same article.
FWIW, it's not possible to change the phone's own /etc/hosts
file within the emulator - it's on a read-only file system.
Personally, I'd run a local resolving server on your PC, point your Windows O/S at that, and then override the entries properly.
Unbound will do the job, and has a nice feature to allow you to insert "local data" into your DNS results.