Domain popularity measures how many distinct websites link to yours, counting only one referring domain no matter how many times it links. It's a truer signal of authority than a raw backlink total, because 500 links from a single site count for far less than links from 500 different sites.
Search engines treat each independent domain as a separate vote. Ten sitewide footer links from one partner are really one endorsement repeated; ten editorial links from ten unrelated publications are ten endorsements. That's why domain popularity — often called referring domains — tracks with rankings more reliably than backlinks counted in bulk.
Site A has 5,000 backlinks from 40 domains, mostly blogroll and footer placements. Site B has 900 backlinks from 320 domains, each an in-content mention. Despite a fifth of the raw link count, Site B usually shows stronger, more durable rankings because its links come from a far wider and more natural set of sources.
Sustained, editorial link building is how healthy domain popularity is built.