A domain name is used to identify a website or as part of an e-mail address. It means people can find your website and that e-mails addressed to you can be delivered.
A domain name has to be registered with one of the various Top Level Domain (TLD) Name Registries around the world. You would not normally deal direct with one of these, but through an agent. A Domain Name registration needs to be renewed at regular intervals.
You really do not need to know all the technicalities of how the internet uses domain names.
A domain name consists usually of two parts separated by a "." (full stop) - e.g. lyntonwebdesign.co.uk. The first part can be made up of any number of letters or numbers but it's a good idea to use a combination that is easily remembered and relates to the content of the site. The suffix indicates the TLD. This will be something like ".co.uk", ".org.uk", ".gov.uk", ".com", ".net", etc. The use of some of these is subject to restrictions. A UK based trader would probably opt for .co.uk.
Domain names are registered on a first-come basis. So your choice of domain name may have already been registered by someone else.
The cost of registration and renewal varies significantly from one agent to another. Sometimes it can even be shown as "free" but watch out for hidden charges in such cases e,g. DNS management - an essential for both website and email hosting.
Here at Lynton Web Design we are able to manage registration and renewal our clients' domain names.