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To register your own domain name, you have to do so through a domain registration company (a 'registrar') or through a company affiliated with one. Once registered, no one else can register the same domain name. (see for more information)
Having a registered domain name is not a requirment to setting up your own server.
Further, many MUDs, rather than encurr the cost of a domain name (usually $8-$20/year), simply 'park' at whatever hosting company they employ. This gives you a mud name of say, "yourmud.muddrake.com"
Certain mud hosting companies offer free domain names when you sign up for them. I know does, and I believe wolfpaw still does also.
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