In this article we will cover basics of what a domain name is, how they work and why you need to have at least one. I am going to try and avoid complicated computer terms and stick to explanations that should be easily understood by someone without a computer science degree.
What is a Domain Name? Before we can go into what a domain name is I'm going to tell you why we need them as answers compliment each other. The Internet is just a really big collection of connected computers (a network). For purpose of explaining domain names you can think of Internet a bit like phone system and just like phone system every computer on Internet has it's own phone number except an Internet phone number is called an IP addresses. This address is made up of up to 12 digits in form 188.8.131.52, computers use these IP addresses to send information to each other over Internet.
When Internet was first created it quickly became clear that these IP addresses were not easy to remember and another method was need to make these addresses more human friendly. The solution to this was Domain Name System (DNS). Basically DNS is a really really big phone book for computers. When you type a web site address into your web browser it checks DNS for that website name and finds IP address. Once it has IP address it can then send a message to that computer and ask it for web page you wanted.
Ok so you know a domain name is part of a web site address but which part? Lets look at a website address so we can identify and discuss what bit of it is a domain name. http://www.itxcel.com/index.html
The above address is home page of itXcel web site. It can be split into 3 main parts. The first part is http:// this just tells your web browser what kind of information it is going to get and how to get it. The last part is /index.html this is name of files on remote computer that you want your browser to get. The bit in middle www.itxcel.com is a domain name. This is name that your computer sends to DNS to get back IP address.
So you know what a domain name is and that there is a phone book called DNS to change your easy to remember domain name into an IP address that you computer can understand. The Internet phone book (DNS) is special in that everyone on Internet needs to be able to use it. This makes DNS very very big (100+ million addresses big). Due to size of this phone book it needed to have a carefully organised and managed structure.
Domain names themselves are split into different levels like a hierarchy. The DNS system uses this hierarchy to search DNS for IP address of domain name it is trying to find. The last bit of a domain, in previous example com part is called top level domain. There are a large selection of top level domains like com, net, org and info. There are also very similar endings called country level domains like uk and de. Each of top level and country level domains are managed by a different organization, sometimes these are companies or non profit organizations and sometimes governments. In domain business these organisations are referred to as registries. Each registry looks after it's own part of domain name system. If you decide you want to use a domain name in top level domain com, like mycompany.com you would have to have this name assigned by registry that manages that top level domain (for .com a US company called VeriSign). The process of being assigned a domain name is called domain registration.