It is historically a poor choice of naming by Sun.
The command "domainname" is referring to the NIS naming service. Not the domain name from the fully qualified domain name.
You should have an utility named "dnsdomainname", but even that is not required to have a value either. Read the manpage on dnsdomainname, the section "THE FQDN" shows how it is set, but it really is unnecessary.
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