I think people should pay (way) more attention to the domain name when creating a Lemmy instance. This is, of course, for admins of instances.
Instances such as lemmy.dbzer0.com and lemm.ee and such are just so unfriendly, in the name, that I think they do a disservice to Lemmy. They end up splitting the community. Due to the weird domain names, there will be privacy.lemmy.dbzer0.com, but the domain is just so unfriendly that people will also create privacy.lemmy.world and privacy.lemmy.ml and etc and it just creates unnecessary friction.
If you are considering creating a lemmy instance, please, please, think of the domain name. You cannot change it later!
I dont think there are multiple privacy communities because of the donain names. Its because people disagree with and dont want to be on or associate with thise instances lemmy.ml is a tankie instance, dbzer0 is specifically only for anarchists, etc.
So its actually doing what the fediverse was designed to do, and allow people to have spin offs in their own flavor. Whatever the reasoning behind creating multiple of these communities is, Im almost certain it has nit been because the domain name was too unfriendly. This is especially apparent if you look at all the popular 196 communities and why they were made.