$domain
is the unique identifier for retrieving translated strings.
It is set in functions.php
<?php load_theme_textdomain( $domain, $path ) ?>
ex:
load_theme_textdomain('my_theme', get_template_directory() . '/languages');
<?php _e( 'Translate this text', 'my_theme' ) ?>
If you don’t have a translation file but want’t to make it translatable just define the textdomain.
load_theme_textdomain('my_theme');