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An internationalized domain name (IDN) is an Internet domain name that contains at least one label that is displayed in software applications, in whole or in part, in a language-specific script or alphabet, such as Arabic, Chinese, Cyrillic, Tamil, Hebrew or the Latin alphabet-based characters with diacritics, such as French. These writing systems are encoded by computers in multi-byte Unicode. Internationalized domain names are stored in the Domain Name System as ASCII strings using Punycode transcription.

(From Wikipedia.)

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