A fully qualified domain name is the full length DNS name associated with a resource on the IP network (eg the Internet) and representing a branch in the DNS hierarchy (eg [www].[efficientip].[com]). On the flip side we could use “short names” or hostnames which are unqualified and that will be suffixed with a domain name in order to build a usable FQDN when required.
FQDNs are used in any interaction on the Internet and by extensions on any IP network as they are easy to remember resource names compared to IP addresses. Through the DNS resolution process, FQDN tadds a level of abstraction between a service name and the effective IP address of the resource hosting the service. This allows easy addition of load balancing functionality and redundancy in the IP networks which is inherent with modern services for billions of users or machines.
As an extension, FQDN could be used for any kind of DNS records, not only IP names, for example TXT records can be associated to FQDN.