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USES: Their main use is for trade - they are worth 250 each. They are also construction requirements for several buildings. You need 2 DA to build a Stable which will produce more Domesticated Animals in exchange for around 200 grain ( Barley, Corn, Oats, Rye, Sorghum, or Wheat). You need 4 DA to make one of the Animal Pens (Milk, Eggs or Wool). And you need 12? DA to make the Milking Barn.
DA when stored or traded are generic animals - not a specific species.
DA can be obtained by trading as you have noted but they can also be randomly "found" when clearing land or specifically looking for them using a building called a "wild shepherd" that when staffed will increment the number of gatherers.
DA can also be manufactured by building a stable. The stable requires to be staffed and supplied with one of the grains.
One can either trade them or use them in animal pens to provide milk, wool, or eggs. Small amounts of either leather or feathers are also produced depending on the pen.
I have rarely played vanilla Banished and almost always play with Colonial Charter and the Megamod. As a result I am not completely sure whether the Wild Shepherd building or the Stable is part of the vanilla game or not...
In practical terms, particularly in the early game I like to seek out DA and use them to produce wool. I make wool coats and trade those for handsome returns.
In the middle part of the game I sometimes also create a stable and then trade the excess DA produced - the mechanics seem better then buying trade animals and then breeding and trading those.