A universe of discourse is the set of all objects presumed or hypothesized to exist in the world. The notion of object used here is quite broad. Objects can be concrete (e.g. a specific carbon atom, Confucius, the Sun) or abstract (e.g. the number 2, the set of all integers, the concept of justice). Objects can be primitive or composite (e.g. a circuit that consists of many subcircuits). Objects can even be fictional (e.g. a unicorn, Sherlock Holmes).
Different users of a declarative representation language, like KIF, are likely to have different universes of discourse. KIF is conceptually promiscuous in that it does not require every user to share the same universe of discourse. On the other hand, KIF is conceptually grounded in that every universe of discourse is required to include certain basic objects.
The following basic objects must occur in every universe of discourse.
Remember, however, that to these basic elements, the user can add whatever non-basic objects seem useful.