A domain is a storage for some column attributes. Using domains you can create a column with all the required properties already defined (e.g. data type, length, precision, etc.), and modify a number of columns at once.
To create a domain and set all the domain properties use the Domain Manager. This tool allows you to add, modify, and remove domains.
After you have created diagram domains, it becomes much easier to add columns to the diagram tables - you can simply select the appropriate domain for the column within the Column Editor, and this assigns all domain attributes to the corresponding column attributes. It is also much more convenient to modify the domain-based columns than usual columns. Modifying any of the domain attribute updates all the columns, based on this domain.