A Department is a standalone database with its own email, contacts, calendar, users and settings. When you create a department, you select its @annelite.net address which is then used to receive email.
Admins have access to all departments, and can set permissions for Users to access some departments and not the others.
As a rule of thumb, if your projects or lines of business have mostly overlapping contacts, then it’s a good idea to stick with one department, using tags and groups to segment the database. If the contacts do not overlap, then create a separate department for each project.