As a business grows, need for multiple domains arises. Viewing this requirement, hosting companies started offering unlimited domain hosting or multiple domains hosting plans eliminating the restriction of hosting single domain only. With that hosting provider offers to host unlimited sub-domains, Addon domains, databases, FTP and e-mail accounts on each domain. The only limit apply is allocated resource for web disk space and bandwidth. Each domain managed through the single control panel.

Domain Name System (DNS) point domain towards IP address of the server. When a domain name entered, DNS records holding information of every website on Internet fetches the server IP address and serve the site.
When a customer migrates, only IP changes, domain name remains same. Nobody can remember numeric IP's, but domain names are rememberable.

A Hosting server has DNS server installed, designed to manage the domains records.

DNS Records

Nameservers: routes incoming information to the intended destination.

A Record: Purest form of DNS and it points domain to an IP address

AAAA Record: Same as A record and allows to point a domain to an IPv6 address instead of an IPv4 one.

CNAME (Canonical name): redirects one domain to another. Mostly, www CNAME record points to a domain name.

TXT Records: a bit of a catch-all record, to provide information to external sources. Depending on needs serves different purposes.

MX (mail exchanger) Entry: specify email route to a different server despite being a subdomain