Figure 1: Domain Name Hierarchy

 The root is divided into 250 top-level domains (TLDs), and there are two broad classes of TLDs. So-called country-codes (ccTLDs) are two-letter codes based on the ISO3166 list of recognized countries. The six generic identifiers (gTLDs), most notably .com, are based on a simple taxonomy invented in the mid-1980s by the Internet's pioneers. The distinction between ccTLDs and gTLDs is based entirely on semantics and policy. It has nothing to do with how either operates. Both are simply text entries in a database with pointers to name servers.

Restrictions on the number and type of TLDs also are administrative, not technical. At some point, expanding the number of TLDs might break down the hierarchical nature of the DNS and create routing and congestion problems. But there are no serious technical objections to the addition of, for example, 5,000 new TLDs. Indeed, there are strong reasons to believe the system could accommodate as many as one million new TLDs. Whether there is any need or market demand for that many is an entirely separate matter.