I'm adding this Q/A because I just stumbled upon this limitation today, and I was not able to find any documentation about it; there is an old KB article about this issue, but it's currently not indexed by Google (probably because it was published years ago and never updated), and the issue is never mentioned elsewhere.

Is it possible to create a OU in the parent domain with the same name as a child domain?
Is it possible to create a child domain with the same name as a OU in the parent domain?


No, this is not possible if the OU is located at the root level in the parent domain (there is instead no issue if the OU is located in a subtree).

Reference: http://support.microsoft.com/en-us/kb/240147.

The KB article is very old and only mentions Windows 2000, but the limitation still applies as of Windows Server 2012 R2.

Oddly, the official guide about Active Directory naming conventions doesn't explicitly mention this issue: it only says that you can run into it even after you delete the conflicting item, due to lingering tombstoned objects.

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