TL;DR it's all about search domains.
DNS Search Domains are a client-side helper for resolving short names (identified as not containing a dot) to Fully Qualified Domain Names (FQDNs) - these do have dots
For example, let's say I have a bunch of development machines dev1, dev2 and dev3 that are all hosted at stage.example.com. Rather than typing dev1.stage.example.com to reach my machine, I can configure a search domain of stage.example.com. Now when I query dev1 and do not get a response from the name server, I will append stage.example.com and query for dev1.stage.example.com. I've made it simpler from a user's perspective at the expense of an extra DNS query.