Each machine will maintain and update a local list of network names (in some folder somewhere) in order to resolve network addresse requests. These request may come from the local machine's applications/users or from another machine (ie. a peer). To resolve these requests, this networking "binding" will check its itself then its list of network names, then "query" each machine to ask if they know the name. One the name is resolve the local list is updated (if the name wasn't found there). Presumably, changes are similarly updated when a connection attempt fails.
Authentication of peer is not clearly specified nor is the type/format of network names and their address (I guess IP/URL).
Presumably the domain (or rather the namespace or collection of knowable names) is the list of all potential connections through this resolution system.