The top-level domain (TLD) that you’ve queried, “XN—MGBA3A4F16A”, is actually an internationalized country code (ccTLD). This specific domain refers to Iran and its translation in the English language is “.IRAN” in Persian script. This is a part of the unicode system for internationalized domain names (IDNs).
In fact, to overcome the issue of non-ASCII scripts in domain names, a system called Punycode was developed as part of the Internet standards. Punycode is a way to represent Unicode characters using only the ASCII characters that are supported by the Domain Name System. In this coding scheme, the domain “XN—MGBA3A4F16A” would translate as “.iran” (“.ایران” in Persian).
The use of such domains started when the Internet Engineering Task Force (IETF) published a series of protocols commonly known as Internationalized Domain Names in Applications (IDNA). The protocols were defined in order to overcome the limitations of the domain name system which only allows a certain set of characters (A-Z, 0-9 and hyphen) to be used in domain names. IDNA established a mechanism to convert internationalized domain names, which can contain characters from any language, into a set of ASCII characters that are allowed in DNS records.
If you are interested in where this information comes from, it is available from the Internet Assigned Numbers Authority (IANA). IANA is responsible for the global coordination of the DNS Root, IP addressing, and other Internet protocol resources, and maintains a root zone database. The root zone database represents the delegation details of top-level domains, including gTLDs such as .com, and .net, and country-code TLDs such as .uk (United Kingdom), .us (United States) .au (Australia), .jp (Japan), and so forth.
ICANN, or the Internet Corporation for Assigned Names and Numbers, is another organization that delegates these TLDs. The establishment of “.ایران” was approved back in 2010 by ICANN.
To offer an example of the usage of the domain “XN—MGBA3A4F16A”, it could be used for a website that wants to appeal directly to an Iranian audience, using the Persian language. For instance, a company based in Iran might want to use this domain to show its authenticity and to make the site more accessible to local users. The domain could be used to create an URL like: www.example.xn—mgba3a4f16a that would be displayed in a browser that supports IDNs as: www.example.ایران
Sources:
1. ICANN
2. IANA
3. Internet Engineering Task Force (IETF)
4. Punycode Explanation, Simple DNS Plus