Active Directory sites describe your physical network so AD can make sensible decisions. A site is a set of well-connected IP subnets, typically one office or datacenter. Sites control two things: which DC a client talks to (clients prefer DCs in their own site for logon, a process called site coverage and DC locator), and how replication flows. Inside a site, DCs replicate quickly and uncompressed, triggered by change notification within seconds. Between sites, replication is compressed and runs on a schedule to save WAN bandwidth.
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