A domain hack is an unusual domain name that combines domain labels, especially the top-level domain (TLD), to spell out the full "name" or title of the domain, creating a kind of play on words.
For example the second-level domain (SLD) blo.gs makes use of the TLD .gs (South Georgia and the South Sandwich Islands) to spell "blogs", chronolo.gy uses the TLD .gy (Guyana) to spell "chronology", and tel.ly uses the TLD .ly (Libya) to spell "telly" - a popular British slang term for television.
The third-level domains del.icio.us and cr.yp.to make use of the SLDs icio.us and yp.to from the TLDs .us (United States) and .to (Tonga) to spell "delicious" and "crypto" respectively.
In this context, the "hack" represents a trick (as in programming), not an exploit or break-in (as in security).
Domain hacks offer the ability to create extremely short domain names. For example, blo.gs has a total of only five letters, versus the blogs.com (eight letters) or www.blogs.com (eleven letters). Domain hacks default to the omission of the www. prefix, with the side effect of shortening the domain name, as every letter is taken into account as the site's title.