Law Domain Realm cultivators possessed Law Domains, whilst Demonic Beasts possessed Passive Domains.
A Law Domain Realm cultivator's Law Domain was the physical manifestation of their understanding of their specific Principle or Principles.
Being a Law Domain Realm cultivator would mean being enlightened to the point where one understood the true nature and law of the universe. This law would be one's understanding of their own Principle.
The number of laws of the universe one can understand and the number of Law Domains one can form in the Law Domain Realm depended on how many Principles one had comprehended and manipulated in the previous 2 cultivation realms.
As a result of understanding a law or multiple laws of the universe, one would be able to control the activation and deactivation of their single or multiple Law Domains.
However, the opposite applied to Rank 8 Demonic Beasts.