ENS(Ethereum Name Service) is a project under the Ethereum community which goals to make a decentralized domain name registry.
It is not just a naming service for Ethereum. It is built on top of the Ethereum platform which can be used by anyone. (basically providing domain service)
ENS is just a lookup system that links information to a name.

Brief Explanation

In the initial phase of the web, when a person wanted to access a website. That person needs to type the IP address(a string of numbers that was difficult to remember 132.434.244.5) of that website. DNS was introduced to solve this problem which provided a readable name to websites.

The above image shows how DNS works and what the actual fields are.

But there are some limitations with DNS like Spoofing and Denial of Service (DOS) attacks.

ENS serves the same purpose as DNS but with Ethereum addresses and no vulnerabilities at all. It was first started on the Ropsten Test network and claimed on Main-net in May 2017. It always ends with .eth suffix. It means one can send ether or ERC Tokens to abc.eth rather that "8f843738f9....."(address).

What makes ENS different?

ENS maps hashes of domains name to address not the actual domain itself.
Prevents spamming while registering a new domain as long as the hash is visible in the contract.
Hash has constant space no matter the length of a domain name which optimizes storage.
It prevents domain squatting. The Traditional technique of buying a domain name and selling them at high prices.

How it works?🧐

The ENS registry Smart Contract is the backbone of this service which maps the representation of Domain name to ENS resolver.
ENS is made up of two contracts:
ENS registry records all the domains and subdomains, as well the owner’s detail and the link to the Resolver, which is another smart contract that handles the translations from names to addresses or other types of resources.

One can buy ENS domains by participating in an auction. It is a 5 days auction basically where participants bid as the maximum amount of ether they want to buy that particular domain. Results are announced after 3 days and the winner just pays the amount of second-highest bid. Then all the participants are needed to reveal their bid in the next 2 days for getting their refund back. Whoever misses this is not refunded.
The winner is not paying to buy. That person just locks that amount as long as they are the domain name. Once the time is completed they can claim ether back or just renew the domain name again.

Further Possibilities

ENS is not limited to .eth. ENS has plans to integrate the whole of the DNS namespace–that is more than 1,500 top-level-domains, so that owners of a DNS site can claim the use of that name on ENS. Not as .eth but also as .org. So, abc.org can be linked to abc.eth, and visitors can view content and send money to the same place. The future, it seems, looks a lot like the past.

One can also get domains by emoji symbols(😃😃😃.eth) from ethmojis.com.