In computer networking, a failure domain encompasses a section of a network that is negatively effected when a critical device or network service experiences problems. The size of a failure domain and its potential impact depends on the device or service that is malfunctioning. For example, a router potentially experiencing problems would generally create a more significant failure domain than a network switch would.
Smaller failure domains reduce the risk of disruption over a large section of a network, and eases the troubleshooting process.
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Failure domain Wikipedia(Text) CC BY-SA