Further Explanation
The distinction between broadcast and collision domains comes about because simple Ethernet and similar systems use a shared transmission system. In simple Ethernet (without switches or bridges), data frames are transmitted to all other nodes on a network. Each receiving node checks the destination address of each frame, and simply ignores any frame not addressed to its own MAC.
Switches act as buffers, receiving and analyzing the frames from each connected network segment. Frames destined for nodes connected to the originating segment are not forwarded by the switch. Frames destined for a specific node on a different segment are sent only to that segment. Only broadcast frames are forwarded to all other segments. This reduces unnecessary traffic and collisions.
In such a switched network, transmitted frames may not be received by all other reachable nodes. Nominally, only broadcast frames will be received by all other nodes. Collisions are localized to the network segment they occur on. Thus, the broadcast domain is the entire inter-connected layer two network, and the segments connected to each switch/bridge port are each a collision domain.
Not all network systems or media feature broadcast/collision domains. For example, PPP links.
Read more about this topic: Broadcast Domain
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