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One of the main goals of using domains is differentiating access to various parts of Sitecore. For instance, the default Sitecore installation has two domains configured: Sitecore and Extranet. These domains divide all users of the Sitecore solution into two groups: Extranet domain defines who can access the information published on the web site, while Sitecore domain defines access credentials for the Sitecore shell users (Editors, Webmasters, etc.).

The default setup described above provides the following benefits: Extranet users work with the web database only, so it is possible to move extranet and web databases to a separate server, thus unloading the main server, where all other databases reside.

Sitecore Domains allow plugging in external modules which handle user credential validation. For instance, LDAP module integrates Sitecore security with Active Directory.

Every site in Sitecore references a single domain. Sites may share the same content resources, but have different domains (and different users and security groups accordingly) and vice versa.
Refer to Configuring Multiple Sites article for instructions on adding extra sites to Sitecore.

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