The Internet is a very big place. In order to organize it and move traffic around every machine is assigned a number. This number isn't easy to remember so to make it simpler a host name can be associated with that number. But now you need to organize host names on the internet. Domains are used to organize host names on the internet.
Domains also make it easy to remember and retrieve information.
With a domain you can establish a 'place' on the internet for goods, services, information, or just to be cool. Think of what you want your domain to be. You can try out ideas by entering them in the text box on the first page of domain registration. If the domain is available, it will be displayed along with similar domains that are available. Choose one and you are ready to go onto the next step.