WordPress

The necessary files (and DB) for that domain must be present on the hosting
in that home directory for that domain

otherwise, anyone could put the address “www.google.com” in their WP and serve (which of course is not possible)

means when you add a domain
and before that, you specify the required nameservers

the browser then resolves that domain address using DNS
and knows that it needs to come here on hosting

and then further the hosting server takes over
and finds your domain in the system
etc. etc.

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