A “custom” top-level domain like .observer or .works isn’t something Neocities itself creates, those are real, officially registered TLDs managed by large domain registries (companies approved by ICANN).

Someone (a company, not an individual) applies to ICANN and pays hundreds of thousands of dollars to operate a new TLD like .works.

Once approved, they sell subdomains under it, so corru.works is just a normal domain name purchased from that registry, like buying myname.com.

Neocities then lets users point their sites to those domains (by updating DNS records), but it doesn’t own or create the TLDs itself.

So yes, creating your own TLD is expensive and complex, but using a newer one (like .observer or .works) is easy and cheap, you just register it through any domain provider.