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Note: The following is an excerpt from the official Ethereum site. It is provided here as a convenience and is not authoritative. Refer to the original document as the authoritative reference.

This draft EIP describes the details of the Ethereum Name Service, a proposed protocol and ABI definition that provides flexible resolution of short, human-readable names to service and resource identifiers. This permits users and developers to refer to human-readable and easy to remember names, and permits those names to be updated as necessary when the underlying resource (contract, content-addressed data, etc) changes.

The goal of domain names is to provide stable, human-readable identifiers that can be used to specify network resources. In this way, users can enter a memorable string, such as ‘vitalik.wallet’ or ‘www.mysite.swarm’, and be directed to the appropriate resource. The mapping between names and resources may change over time, so a user may change wallets, a website may change hosts, or a swarm document may be updated to a new version, without the domain name changing. Further, a domain need not specify a single resource; different record types allow the same domain to reference different resources. For instance, a browser may resolve ‘mysite.swarm’ to the IP address of its server by fetching its A (address) record, while a mail client may resolve the same address to a mail server by fetching its MX (mail exchanger) record.