The Active Directory structure is built on the domain level. The framework that holds the objects can be viewed at different levels namely forest, domain trees and domains.
Organizational units (OU) are containers that hold other Active Directory objects like users, computers, printers, shared folders and even other organizational Units. The advantage with OU is that it can be used to set security policies and delegate administrative control.
While forests, trees, domains are all logical grouping of objects, the physical grouping of objects is made possible using a site. A site groups objects based on IP addresses. Hence it cannot span across different physical locations. For example, if there are various branches of your organization located at different places, each location can be identified using a site. A site is mainly used for replication and traffic control purpose. It is important to understand that site and domains are not interrelated – a site can contain multiple domains and a single domain could span across multiple sites.