Fault Domain:
Logical working domain in which the underlying hardware is sharing a common power source and switch network. This means that when VMs is created the Azure distributes the VM across the fault domain that limits the potential impact of hardware failure, power interruption or outages of the network.
Update Domain:
It is a logical group that undergoes maintenance by rebooting the system. The system automatically distributes the created VMs all across the updated domain that enables the user to run any one of the application while the Azure platform is undergoing maintenance. The update domain does not work sequentially to the manual rebooting.
