Do servers hold one website only?

Using DNS you can assign as many names to an individual IP as you want (in your hosts file you may simply separate them with spaces, for example). Using a DNS server you may also assign multiple IPs to a single name. It is not limited to a one-to-one relationship.

A web server knows which site to serve by examining the requested URL. It looks at which domain was requested, the port which was requested and what what protocol was used. This has nothing to do with DNS and is handled by the HTTP protocol.

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