This refers to the system by which the Internet resolves an alphanumeric URL (e.g. www.bbc.co.uk) int a numeric IP address (e.g. 241.1.23.7). It is effectively the Internet's phonebook and is the way in which browsers are able to contact the machines which actually host the required web pages.
It is important for your Moodle site to be reachable from the outside world, so a DNS entry for your server is vital. If you are using a basic hosting plan from an ISP, this is pretty simple.
- Get a domain name from a registrant (e.g. www.123-reg.co.uk). This is the equivalent of paying for an entry in the phone book.
- Set the nameservers at the registrant to those of your ISP. (This will be unnecessary if your ISP and registrant are one and the same.) This is equivalent to writing your phone number into the book.