Jack,
If you never connect to the Internet, you can use anything you want for a domain name. The default, you'll note, is "my.domain" which is not usable on the Internet.
Leaving the Internet OUT of the discussion for the moment:
Domain names are, however, tied to DNS -- domain name resolution to IP address. Some applications will attempt to resolve your fully qualified name, such as bilbo.shire.middle-earth. If that name is not provisioned in a DNS server (and you may have one, Internet or not) you must use file based resolving -- the /etc/hosts file.
On the Internet:
If your OpenBSD platform is publicly exposed to the Internet -- you can use the domain name that resolves to that IP address.
If your OpenBSD platform has an indirect connection, such as on a private IP network, you can use /etc/hosts or your own DNS servers to resolve bilbo.shire.middle-earth.
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