Referring domains counts how many distinct websites link to a site, as opposed to total backlinks, which counts every individual link regardless of how many come from the same source. A hundred backlinks from a hundred different domains is a meaningfully different, generally stronger signal than a hundred backlinks all coming from five sites.
That's why the ratio between the two numbers matters more than either alone. A healthy backlink profile usually keeps referring domains and total backlinks reasonably close together, since organic link-earning naturally spreads across many different sites over time. A profile where backlink count vastly outpaces referring domains, one site linking to another dozens or hundreds of times, looks like a pattern real, distributed linking rarely produces, and can read as manipulative even if no single link is individually spammy. When evaluating link-building progress or a competitor's link profile, referring domain growth is generally the more meaningful number to track than raw backlink count, since it reflects how many distinct sources actually consider a page worth linking to.
