To explain simply, it uses a website to make a handle.

For Example: since I own acceptcrypto.org, I can use a Nip-05 with my website and create a handle that way.

In your case if you wanted a SatoshisNephew.com, as your Nip-05 you would need to own that website.

I have two Nip-05s

Jordan@acceptcrypto.org (Me)

And my project page

_@acceptcrypto.org which translates to @acceptcrypto.org in most clients.

The _ is basically a way to say only use the part after @, ignore the front, like an blankspace.