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Domain names serve to identify Internet resources, such as computers, networks, and services, with a text-based label that is easier to memorize than the numerical addresses used in the Internet protocols. A domain name may represent entire collections of such resources or individual instances. Individual Internet host computers use domain names as host identifiers, also called hostnames. The term hostname is also used for 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 websites (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 Domain Keys used to verify DNS domains in e-mail systems, and in many other Uniform Resource Identifiers (URIs).
An important function of domain names is to provide easily recognizable and memorizable names to numerically addressed Internet resources. This abstraction allows any resource 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.
Domain names are used to establish a unique identity. Organizations can choose a domain name that corresponds to their name, helping Internet users to reach them easily.
A generic domain is a name that defines a general category, rather than a specific or personal instance, for example, the name of an industry, rather than a company name. Some examples of generic names are books.com, music.com, and travel.info. Companies have created brands based on generic names, and such generic domain names may be valuable.
Domain names are often simply referred to 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 for a particular duration of time. The use of domain names in commerce may subject them to trademark law.
Source: Wikipedia