dor·mi·to·ry (dôrm-tôr, -tr) n. pl. dor·mi·to·ries 1. A room providing sleeping quarters for a number of persons. 2. A building for housing a number of persons, as at a school or resort. 3. A community whose inhabitants commute to a nearby city for employment and recreation.

A dormitory is a place where a number of people sleep. Often it is in somewhere like a boarding school, where the school children learn and sleep. Here is a link to a dictionary definition http://www.thefreedictionary.com/dormitory as this link says it can also be used to mean a town or place where people live to be close to where they work, often in a city, so that they don't have to pay as much. E.g. Esher [ a town in Surrey] is a dormitory town for London

It comes from the Latin dormio (I sleep). You can see the word root in "dormant." In the US, it's a building where college students live (eat, sleep, study, loaf).