A DNS Lookup is when a device that supports IP asks a DNS server for the IP address associated with a domain name. The DNS Server must "look up" the IP associated with that domain name.
For example, if you were to go to Answers.com in your browser, your computer would initiate a DNS Lookup. This process involves asking the Primary DNS Server for Answers.com's IP address. The DNS Server will ask other servers until the IP address is found and the information returned to you.
Assuming it is not cached, to find the IP address for wiki.answers.com, your DNS Server would first ask a DNS Root server for the DNS Server that handles "com". The root server would reply with the IP address for "com". Your DNS Server would then find the DNS Server that handles "com" and ask it for "answers.com". The "com" DNS Server would reply with the IP address for "answers.com". Your DNS server would finally find the DNS Server that handles "answers.com" and ask it for "wiki.answers.com".

Linux
A common analogy is that DNS is like a very large phonebook. You look through the phonebook for the name you want and it will tell you the number you need to dial the person you're looking for. The process of looking up the number is a "DNS Lookup".
If you would like to experiment with DNS Lookups, you can use the command line utility "nslookup" in Windows or Linux.
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