As domain names became attractive to marketers—rather than just the technical audience for which they were originally intended—they began to be used in manners that in many cases did not fit in their intended structure. As originally planned, the structure of domain names followed a strict hierarchy in which the TLD indicated the type of organization (commercial, governmental, etc.), and addresses would be nested down to third, fourth, or further levels to express complex structures, where, for instance, branches, departments and subsidiaries of a parent organization would have addresses that were subdomains of the parent domain. Also, hostnames were originally intended to correspond to actual physical machines on the network, generally with only one name per machine.

However, once the World Wide Web became popular, site operators frequently wished to have memorable addresses, regardless of whether they fit properly into the structure; thus, because the .com domain was the most popular and memorable, even noncommercial sites began to obtain domains in that gTLD, and sites of all sorts wished to have second-level domain registrations even if they were parts of a larger entity where a subdomain would have been logical (e.g., abcnews.com instead of news.abc.com). A website found at ''http://www.example.org'' will often be advertised without the http:// and, in most cases, can be reached by just entering example.org into a web browser. In the case of a .com, the website can sometimes be reached by just entering example (depending on browser versions and configuration settings, which vary in how they interpret incomplete addresses).

The popularity of domain names also led to uses which were regarded as abusive by established companies with trademark rights; this has become known as cybersquatting, in which a person registers a domain name that resembles a trademark in order to profit from visitors looking for that address. To combat this, various laws and policies were enacted to allow abusive registrations to be forcibly transferred, but these were sometimes themselves abused by overzealous companies committing reverse domain hijacking against domain users who had legitimate grounds to hold their names. Such legitimate uses could include the use of generic words that are contained within a trademark, but used in a particular context within the trademark, or their use in the context of fan or protest sites with free speech rights of their own.

Laws that specifically address domain name conflicts include the Anticybersquatting Consumer Protection Act in the United States and the Trademarks Act of 1999 in India. Alternatively, domain registrants are bound by contract under the UDRP to comply with mandatory arbitration proceedings should someone challenge their ownership of a domain name.

Generic domain names—problems arising from unregulated name selection

Within a particular TLD, parties are generally free to select an unallocated domain name as their own on a first come, first served basis, resulting in Harris's lament, all the good ones are taken. For generic or commonly used names, this may sometimes lead to the use of a domain name which is inaccurate or misleading. This problem can be seen with regard to the ownership or control of domain names for a generic product or service.

By way of illustration, there has been tremendous growth in the number and size of literary festivals around the world in recent years. In the current context, a generic domain name such as literary.org is available to the first literary festival organization that is able to obtain the registration, even if the festival in question is very young or obscure. Some critics argue that there is greater amenity in reserving such domain names for the use of, for example, a regional or umbrella grouping of festivals. Related issues may also arise in relation to noncommercial domain names.

Unconventional domain names

Due to the rarity of one-word dot-com domain names, many unconventional domain names, domain hacks, have been gaining popularity. They make use of the top-level domain as an integral part of the Web site's title. Two popular domain hack Web sites are del.icio.us and blo.gs, which spell out "delicious" and "blogs", respectively.

Unconventional domain names are also used to create unconventional email addresses. Non-working examples that spell 'James' are j@m.es and j@mes.com, which use the domain names m.es (of Spain's .es) and mes.com, respectively.