Buying an I.P or Domain

I’m just curious on the sites that allow web hosting and creating your own domain on their sites. How does one company get an I.P Address and Domain name on the Internet? Where do they buy it. In the case of Web Hosting Sites, where do they get the I.P Address for your Domain and won’t it conflict with other domains in the entire Internet in case you decided to register a Domain that is already existing on the Internet? Is there any site that can explain to me in Layman’s term how this works? Answers will be greatly appreciated…