Azure Active Directory is the cloud-based version of Active Directory. In comparison, it is a flat design that only allows for one level of hierarchy. To allow for a complex design, however, there are ways to link different Azure ADs to each other:

Each Azure AD is unique, and its name can exist only once:

In addition, you can see that each domain name ends with onmicrosoft.com as a suffix:

Having created the directory, you will get the notification shown in the preceding screenshot. Azure AD is a worldwide service, in general, but you will have the chance to define in which public Azure area it will reside (for example, Europe):

By default, there is no relationship between an Azure AD and the Azure subscription. An Azure AD can exist even without an Azure subscription. This is most likely the case when you are using Office 365 without any Azure services enabled. The one thing that every Azure public cloud service shares is Azure Active Directory:

Azure Active Directory is available in different SKUs, as shown in the following screenshot:

As you can see, the SKUs differ in the services that are available to use. And, as is always the case with Azure, it is possible to switch from one SKU to another. With Azure AD licenses, this is per user.