I believe it is nothing more than a regular domain name that is not connected to the machine its on. In other words it is not the host domain. An example would be that you have a domain, test.com, you sign up for a shared account with Host company and they assign you to server6.host.com. Host.com would be the host account/domain, and you any everyone elses domain would be a virtual domain to that IP/ hosted domain.
I have a friend that refers to it that way.