Your Internet Consultant - The FAQs of Life Online
In the beginnings of the Usenet, back in the early 80s, all newsgroups were organized under a single umbrella prefix of net, so a group discussing editors was called net.editors (you should always pronounce the . as dot, so this group would be called net dot editors) and a group that focused on social issues important to single people was called net.singles.
Around the middle of the 80s, it became clear that this organization wasn't going to work too well and was causing confusion. Instead, a seven-part hierarchy was suggested, where sets of groups were organized by major topic: all computer-related discussion fell into the comp. hierarchy, recreational activities were put in the rec. hierarchy, and so on. In the last few years, the Usenet has dramatically increased in size and now has considerably more than just the original seven. On my main news machine, Netcom, I can find an astounding 284 different top-level newsgroup domains (domain is a fancy, but common, way of talking about the top level names for each group. For example, comp. is the domain of the computer-related discussion groups).