A domain name is an identification label to define a realm of administrative autonomy, authority, or control in the Internet, based on the Domain Name System (DNS).
Domain names are used in various networking contexts and application-specific naming and addressing purposes. Domain names are organized in subordinate levels (subdomains) of the top-level Internet domains (TLDs), such as the prominent domains com, net and org. Below the top-level domains in the DNS hierarchy are the second-level and third-level domain names that are typically open for reservation by end-users that wish to connect local area networks to the Internet, run web sites, or create other publicly accessible Internet resources. The registration of these domain names is usually administered by domain name registrars who sell their services to the public.
Individual Internet host computers use domain names as host identifiers, or hostnames. Hostnames are the leaf labels in the domain name system usually without further subordinate domain name space. Hostnames appear as a component in Uniform Resource Locators (URLs) for Internet resources such as web sites (e.g., en.wikipedia.org).
Domain names are also used as simple identification labels to indicate ownership or control of a resource. Such examples are the realm identifiers used in the Session Initiation Protocol (SIP), the DomainKeys used to verify DNS domains in e-mail systems, and in many other Uniform Resource Identifiers (URIs).
An important purpose of domain names is to provide easily recognizable and memorizable names to numerically addressed Internet resources. This abstraction allows any resource (e.g., website) to be moved to a different physical location in the address topology of the network, globally or locally in an intranet. Such a move usually requires changing the IP address of a resource and the corresponding translation of this IP address to and from its domain name.
This article primarily discusses the group of domain names that are offered by domain name registrars for registration by the public. The Domain Name System article discusses the technical facilities and infrastructure of the domain name space and the hostname article deals with specific information about the use of domain names as identifiers of network hosts.
Allowed character set
Registered domain names are restricted to using the same character set as all other hostnames, as such they typically can use only ASCII letters, numbers and the hyphen (-). The full stop (dot, .) is used to separate DNS labels. Since this rule does not allow the use of other characters commonly found in non-English languages, and does not allow multi-byte characters necessary for most Asian languages, the Internationalized domain name (IDN) system has been developed and is now in testing stage for a group of top-level domains established for this purpose.
The underscore character is frequently used to ensure that a domain name is not recognized as a hostname, as with the use of SVR DNS server records, for example, although some older systems such as NetBIOS did allow it. To avoid confusion and for other reasons, domain names with underscores in them are sometimes used where hostnames are required.
Domain names are often referred to simply as domains and domain name registrants are frequently referred to as domain owners, although domain name registration with a registrar does not confer any legal ownership of the domain name, only an exclusive right of use.
The following example illustrates the difference between a URL (Uniform Resource Locator) and a domain name:
Domain name: www.example.net
Registered domain name: example.net
As a general rule, the IP address and the server name are interchangeable. For most Internet services, the server will not have any way to know which was used. However, the explosion of interest in the Web means that there are far more Web sites than servers. To accommodate this, the hypertext transfer protocol (HTTP) specifies that the client tells the server which name is being used. This way, one server with one IP address can provide different sites for different domain names. This feature goes under the name virtual hosting and is commonly used by web hosts.
For example, as referenced in RFC 2606 (Reserved Top Level DNS Names), the server at IP address 220.127.116.11 handles all of the following sites:
The top-level domains (TLDs) are the highest level of domain names of the Internet. They form the DNS root zone of the hierarchical Domain Name System. Every domain name ends in a top-level or first-level domain label.
When the Domain Name System was created in the 1980s, the domain name space was divided into two main groups of domains.
 The country code top-level domains (ccTLD) were primarily based on the two-character territory codes of ISO-3166 country abbreviations. In addition, a group of seven generic top-level domains (gTLD) was implemented which represented a set of categories of names and multi-organizations.
 These were the domains GOV, EDU, COM, MIL, ORG, NET, and INT.
During the growth of the Internet, it became desirable to create additional generic top-level domains. As of June 2009, there are 20 generic top-level domains and 248 country code top-level domains.
 In addtion, the ARPA domain serves technical purposes in the infrastructure of the Domain Name System.
During the 32nd International Public ICANN Meeting in Paris in 2008,
 ICANN started a new process of TLD naming policy to take a “significant step forward on the introduction of new generic top-level domains.” This program envisions the availability of many new or already proposed domains, as well a new application and implementation process.
 Observers believed that the new rules could result in hundreds of new top-level domain to be registered.
 An annotated list of top-level domains in the root zone database is published at the IANA website at http://www.iana.org/domains/root/db/ and a Wikipedia list exists.
Second-level and lower level domains
Below the top-level domains in the domain name hierarchy are the second-level domain (SLD) names. These are the names directly to the left of .com, .net, and the other top-level domains. As an example, in the domain en.wikipedia.org, wikipedia is the second-level domain.
Next are third-level domains, which are written immediately to the left of a second-level domain. There can be fourth- and fifth-level domains, and so on, with virtually no limitation. An example of a working domain with four domain levels is www.sos.state.oh.us. The www preceding the domains is a host name of the World-Wide Web server. Each level is separated by a dot, or period symbol. ‘sos’ is said to be a sub-domain of ‘state.oh.us’, and ‘state’ a sub-domain of ‘oh.us’, etc. In general, subdomains are domains subordinate to their parent domain. An example of very deep levels of subdomain ordering are the IPv6 reverse resolution DNS zones, e.g., 18.104.22.168.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.0.ip6.arpa, which is the reverse DNS resolution domain for the IP address of a loopback interface, or the localhost name.
Second-level (or lower-level, depending on the established parent hierarchy) domain names are often created based on the name of a company (e.g., microsoft.com), product or service (e.g., gmail.com). Below these levels, the next domain name component has been used to designate a particular host server. Therefore, ftp.wikipedia.org might be an FTP server, www.wikipedia.org would be a World Wide Web server, and mail.wikipedia.org could be an email server, each intended to perform only the implied function. Modern technology allows multiple physical servers with either different (cf. load balancing) or even identical addresses (cf. anycast) to serve a single hostname or domain name, or multiple domain names to be served by a single computer. The latter is very popular in Web hosting service centers, where service providers host the websites of many organizations on just a few servers.
The Internet Corporation for Assigned Names and Numbers (ICANN) has overall responsibility for managing the DNS. It administers the root domain, delegating control over each TLD to a domain name registry. For ccTLDs, the domain registry is typically installed by the government of that country. ICANN has a consultation role in these domain registries but cannot regulate the terms and conditions of how domain names are delegated in each of the country-level domain registries. On the other hand, the generic top-level domains (gTLDs) are governed directly under ICANN, which means all terms and conditions are defined by ICANN with the cooperation of each gTLD registry.
Domain names are often seen in analogy to real estate in that (1) domain names are foundations on which a website (like a house or commercial building) can be built and (2) the highest “quality” domain names, like sought-after real estate, tend to carry significant value, usually due to their online brand-building potential, use in advertising, search engine optimization, and many other criteria.
A few companies have offered low-cost, below-cost or even cost-free domain registrations with a variety of models adopted to recoup the costs to the provider. These usually require that domains be hosted on their website within a framework or portal that includes advertising wrapped around the domain holder’s content, revenue from which allows the provider to recoup the costs. Domain registrations were free of charge when the DNS was new. A domain holder (often referred to as a domain owner) can give away or sell infinite number of subdomains under their domain name. For example, the owner of example.edu could provide subdomains such as foo.example.edu and foo.bar.example.edu to interested parties.
Reference: Wikipedia [http://en.wikipedia.org/wiki/Domain_name]