The embodiment of one understanding in the laws of heaven and earth, it take the form of a territory where the cultivator who activate it is at advantage against other by how far their understanding and control of the laws are compared to they're opponents (allies can be exempted by the will of the owner of a spirit domain).
There is four level of proficiency in a spirit domain, the first one is the manifestation stage, you reached a thresold in our comprehension of the laws of heaven and earth enabling you to manifest it in the form of a domain, that is the spirit domain; the second one is the creation stage, our profeciency in the laws of heaven and earth had reached a level where in our spirit domain an environment and other thing can be created corresponding to the law cultivated, further enhancing it's might and durability (for the law of ice it could be a blizzard/snow and stalactite, for the law of fire it is a plain of flames or a sun even maybe both, etc); the third one is the Spiritform stage, at this level one has managed to manifest in their spirit domain a consciousness who can further enhance the power and control of a spirit domain making it has if the cultivator who activate it obtained a replica of himself; the fourth one is the corporealization stage, the comprehension of the law of heaven and earth of the cultivator spirit domain is so high that the spirit domain as gone from illusory to corporeal, to attain this stage one as to attain all the previous stage making it so that a cultivator who attained this stage is minimum a Zenith Heaven cultivator.
The second and third level can be cultivated in any order but cultivators prefer to cultivate the second level and after this the third level, it was just like how houses were built in the mortal world. The safest way to do so would be to build a stable house with all the necessary furniture and supplies before hiring someone to stay in the house. If a cultivator decided to cultivate the third level without having cultivated the seconde level, that would be equivalent to having one's own Domain Spirit grow in a desolate wilderness, which would be detrimental to the Domain Spirit's own consumption and future growth. Furthermore, there was a limit to how effective such a spiritual domain could be when used. Most of the time, such a spiritual domain would only have a shape and no charm to it.
The fourth level can be cultivated more faster by using an object of law (material, weapon, etc) and fusing it with the Spirit Domain to form the Corporeal stage (the object as to at least posses the same amount of law in it than a fourth grade immortal artifact).