When you’re working in Active Directory, you see a tree-type structure going down through various organizational units (OU’s). The easiest way to explain this is to run through a hypothetical example.
Say that we had a location reporting for CNN that dealt with nothing but the Detroit Lions. So we would setup a location with a single domain, and computers for each of our users. This would mean starting at the bottom: OU’s containing the users, groups and computers are at the lowest level of this structure. A Domain is a collection of these OU’s as well as the policies and other rules governing them. So we could call this domain ‘CNNDetroitLions”. A single domain can cover a wide area and include multiple physical sites, but sometimes you need to go bigger.
A tree is a collection of domains bundled together by a common domain trunk, rules, and structure. If CNN decided to combine all of its football team sites together in a common group, so that its football sports reporters could go from one location to the next without a lot of problems, then that would be a tree. So then our domain could be joined up into a tree called ‘football’, and then the domain would be ‘CNNDetroitLions.football’ while another site could be called ‘CNNChicagoBears.football’.
Sometimes you still need to go bigger still, where a collection of trees is bundled together into a Forest. Say CNN saw that this was working great and wanted to bring together all of its reporters under a single unit- any reporter could login to any CNN controlled site and call this Forest ‘cnn.com’ So then our domain would become ‘CNNDetroitLions.football.cnn.com’ with another member of this same Forest could be called ‘CNNNewYorkYankees.baseball.cnn.com’, while yet another member could be ‘CNNLasVegas.poker.cnn.com’. Typically the larger an organization, the more complicated it becomes to administer, and when you get to something as large as this it becomes exponentially more difficult to police.