As the system was adapted for general use, USENET expanded and the seeds of the current system were planted. You had individual messages ("posts" or "articles") organized and grouped together by specific topics ("newsgroups").
More and more universities started participating, generating more posts in more newsgroups. Eventually a way was developed to transfer messages over the Internet and the number of participating sites grew even faster (since long-distance calls to transfer thousands of messages were no longer required).
This is too many groups to handle in a hodge-podge fashion, so even early in USENET's history, newsgroups were placed into catagories (called "hierarchies"). These hieracrchies are contained in part of the name and lets users quickly determine he general content of a specific newsgroup. For example the following are some of the major hierarchies today:
Let's take an example of a newsgroup for trading card games. (Not that I'm into trading cards, but this example demonstrates things very well.) It's a recreational topic so it appears under the rec group. They're games so it makes sense to discuss them under games, so the logical place would be in the newsgroup called rec.games.
As you could imagine, rec.games is too general a catagory. The group would soon become swamped with posts on all types of games. So new groups are created for specific types of games. Trading cards are given the new newsgroup rec.games.trading-cards.
The group is full of posts from people who just want to discuss the various games. However, these are trading cards so there are also people posting looking to trade, buy or sell cards and some of those people may not care about the finer points of the games. To lessen the number posts in the group in general and prevent the written... skirmishes of the two sides complaining about each other, another newsgroup is created underneath the trading cards group just for dealing with card transactions. This new group is called rec.games.trading-cards.marketplace.
Now comes along this popular new game called Magic: The Gathering. Suddenly rec.games.trading-cards sees a huge number of new posts from new players just dealing with this one game. Once it looks like this isn't just a fad, a new group is formed again, this time just for the Magic game. The new newsgroup is called rec.games.trading-cards.magic. At the same time a new group is added under marketplace to handle just the Magic trade, rec.games.trading-cards.marketplace.magic
This example is a general indication on how newsgroups are formed and named. (Although most don't get as long as the above.)
There are several special hierarchies used for local (only on one Internet provider) or regional (such as a state) distribution. For example, there's a starnet hierarchy on StarNet's news server. All these groups are for StarNet subscribers and appear only on StarNet's news server (i.e. you won't be able to get the newsgroup starnet.support from Primenet's or AOL's news server). On the regional level, there is the az hierarchy. These groups are for discussing topics relevent to Arizona. Thus the newsgroup az.politics is for discussing Arizona politics. Typically, these groups will be found only on news servers within that region--though they are open to any news server.