A domain name is the address of your website. For instance, www.versio.uk is a domain name, as are www.nominet.org.uk and www.yahoo.com. A domain name is nothing more than the address of the website. You type this address when you wish to visit a website.
The house you live in, has an address, as does the company you work for. And that's a good thing. Because of addresses, people and companies all around the world can be found. Internet works exactly the same. To be able to find a website, you need the address of that website. An address on the internet is called a domain name.