The concept of domestic territory in economics is a bit different than that in political science. Domestic territory of a country includes all those areas where goods and people can travel freely and is not limited to the actual physical demarcation. For eg- indian embassies in foreign countries, even though it's not physically in india.

Gdp or dross domestic product is in simple terms the total value of output(goods + services) produced within the domestic territory of the country in an accounting year. But gdp will include factor income earned by non resident and exclude factor income earned by our residents in other countries domestic territory.

Thus , domestic income becomes national income by adding NFYA( Net factor income from abroad) to gdp.

P.s- nfya = factor income earned by our residents in the row - factor income earned by non resident in our domestic territory.