A broadcast domain is a network of computers (joined by a switch) that can receive broadcast messages. Too many devices on a broadcast domain can have a negative impact on the networks performance. That is one reason why companies split and group their devices in different isolated local area networks (LAN). Another reason is that you can logically group devices together based on their task/purpose. Perhaps some devices should not connect to the internet.

You can have many isolated LANs attached to a single Switch by creating a Virtual LAN (VLAN):

You can even have your devices scattered over several buildings and still have them belong to their own virtual networks! In the following illustration we have such as situation: Two VLANs with devices scattered over two buildings, each building has a Switch, both Switches are connected via a special connection, a so called Trunk Link:

If device 172.16.0.55/24 wants to send a message to device 172.16.0.66/24 in the other building, then it has to pass the Trunk Link. Switch #1 will add information to the frame header to include the VLAN number from where this frame originated: It attaches VLAN #2 tag. The second switch in the other building evaluates the tag, removes it and finally forwards the message. Only traffic that passes the Trunk Link is tagged.