A fault domain is a set of hardware components that share a single point of failure . To be fault tolerant to a certain level, you need multiple fault domains at that level.

https://www.c-sharpcorner.com/article/availability-set-fault-domains-and-update-domains-in-azure-virtual-machie/

Fault domains define the group of virtual machines that share a common power source and network switch. By default, the virtual machines configured within your availability set are separated across up to three fault domains.

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