What exactly is "server_name" in nginx configuration file ?

What exactly is “server_name” in nginx configuration file ?

I’m trying to set up 2 websites with different domain names. I bought 2 domain names and pointed them to my droplet IP. I use Ubuntu droplet and nginx.

It works when I set only 1 website - then both domain names results by opening that website.

But later I tried to create 2 websites and set nginx to serve each website to its domain name. I get one of the two results: both domain names opens first website, or both domain names get ERR_CONNECTION_REFUSED.

I played around with the nginx configuration, looked at some tutorials here, but it doesn’t work for me.

So I want to go from start :-)

What exactly is “server_name” ? And what should it looks like ? Like domain name, folder name, configuration file name ?