How would it work? Would it be like ****** where you upload your files and have a website, or would it work differently? Also where would I buy a domain? This whole part confuses me.
The domain is pretty much, just the name of the site. You can buy a simple set up thing along with the domain to make different catergories, but if you were making a Sythe like site, you'd need to purchase vBulletinon or IPB aswel.
First you need to buy hosting. They tell you their name server(s). Then you buy a domain which simply redirects the user going to the domain to the actual IP address of the server. Then you add the nameserver to the domain and once the DNS updates the URL will work.
If you want to make a website you will need basic knowledge of networking, and a web scripting language such as HTML or PHP. I prefer using Name.com to buy domains. I would also use Godaddy's cheap Linux VPS for file hosting.