While the term "domain" is often used synonymously with "domain name," it also has a definition specific to local networks.
A domain contains a group of computers that can be accessed and administered with a common set of rules. For example, a company may require all local computers to be networked within the same domain so that each computer can be seen from other computers within the domain or located from a central server. Setting up a domain may also block outside traffic from accessing computers within the network, which adds an extra level of security.
While domains can be setup using a variety of networking software, including applications from Novell and Oracle, Windows users are most likely familiar with Windows Network Domains. This networking option is built into Windows and allows users to create or join a domain. The domain may or may not be password-protected. Once connected to the domain, a user may view other computers within the domain and can browse the shared files and folders available on the connected systems.
Windows XP users can browse Windows Network Domains by selecting the "My Network Places" option on the left side of an open window. You can create a new domain by using the Network Setup Wixard. Mac users using Mac OS X 10.2 or later can also connect to a Windows Network by clicking the "Network" icon on the left side of an open window. This will allow you to browse local Macintosh and Windows networks using the SMB protocol.