DNS organizes host names in a hierarchy of domains. A domain is a collection of sites that are related in some sense --- be it because they form a proper network (e.g. all machines on a campus, or all hosts on BITNET), because they all belong to a certain organization (like the U.S. government), or because they're simply geographically close. For instance, universities are grouped in the edu domain, with each University or College using a separate subdomain below which their hosts are subsumed. Groucho Marx University might be given the groucho.edu domain, with the LAN of the Mathematics Department being assigned maths.groucho.edu. Hosts on the departmental network would have this domain name tacked onto their host name; so erdos would be known as erdos.maths.groucho.edu. This is called the fully qualified domain name, or FQDN, which uniquely identifies this host world-wide.
Figure: A part of the domain name space
Figure shows a section of the name space. The entry at the root of this tree, which is denoted by a single dot, is quite appropriately called the root domain, and encompasses all other domains. To indicate that a host name is a fully qualified domain name, rather than a name relative to some (implicit) local domain, it is sometimes written with a trailing dot. This signifies that the name's last component is the root domain.
Depending on its location in the name hierarchy, a domain may be called top-level, second-level, or third-level. More levels of subdivision occur, but are rare. These are a couple of top-level domains you may see frequently:
Technically, the first four of these belong to the US part of the Internet, but you may also see non-US sites in these domains. This is especially true of the net domain. However, mil and gov are used exclusively in the US.
Outside the US, each country generally uses a top-level domain of its own named after the two-letter country code defined in ISO-3166. Finland, for instance, uses the fi domain, fr is used by France, de by Germany, or au by Australia etc. Below this top-level domain, each country's NIC is free to organize host names in whatever way they want. Australia, for example, has second-level domain similar to the international top-level domains, named com.au, edu.au, and so on. Others, like Germany, don't use this extra level, but rather have slightly longish names that refer directly to the organizations running a particular domain. For example, it's not uncommon to see host names like ftp.informatik.uni-erlangen.de. Chalk that up to German efficiency.
Of course, these national domains do not imply that a host below that domain is actually located in that country; it only signals that the host has been registered with that country's NIC. A Swedish manufacturer might have a branch in Australia, and still have all its hosts registered with the se top-level domain.
Now, organizing the name space in a hierarchy of domain names nicely solves the problem of name uniqueness; with DNS, a host name has to be unique only within its domain to give it a name different from all other hosts world-wide. Furthermore, fully qualified names are quite easy to remember. Taken by themselves, these are already very good resaons to split up a large domain into several subdomains.
But DNS does even more for you than than this: it allows you to delegate authority over a subdomain to its administrators. For example, the maintainers at the Groucho Computing Center might create a subdomain for each department; we already encountered the maths and physics subdomains above. When they find the network at the Physics Department too large and chaotic to manage from outside (after all, physicists are known to be an unruly bunch of people), they may simply pass control over the physics.groucho.edu domain to the administrators of this network. These are then free to use whatever host names they like, and assign them IP addresses from their network in whatever fashion the like, without outside interference.
To this end, the name space is split up into zones, each rooted at a domain. Note the subtle difference between a zone and a domain: the domain groucho.edu encompasses all hosts at the Groucho Marx University, while the zone groucho.edu includes only the hosts that are managed by the Computing Center directly, for example those at the Mathematics Department. The hosts at the Physics Department belong to a different zone, namely physics.groucho.edu. In figure , the start of a zone is marked by a small circle to the right of the domain name.