“Domestic shipping” means shipping within the same region as the site on which you choose to list.
“International Shipping” means you are willing to ship the item internationally.
For example: Suppose you list your item on ebay.com (the US website), you may choose to offer “Free Shipping” under “Domestic Shipping” and under “International Shipping – Worldwide” you may charge USD 20.
This would mean that any buyer whose shipping address is within USA would be eligible for free shipping. Any buyer whose shipping address is outside USA would need to bear the shipping cost of USD $20 in addition to the item value.