As a language that is designed to support dynamic loading of modules over the entire Internet, Java takes special care to avoid name space conflicts. Global variables are simply not part of the language. Neither are "global" functions or procedures, for that matter.
In Java, every field and method is declared within a class and forms part of that class. Also, every class is part of a package (in Java 1.1, classes can also be declared within other classes). The fields and methods (and classes in 1.1) of a class are known as the members of a class. Every Java field or method may be referred to by its fully qualified name, which consists of the package name, the class name, and the member name (i.e., the field or the method name), all separated by periods. Package names are themselves usually composed of multiple period-separated components. Thus, the fully qualified name for a method might be:
A file of Java source code has the extension .java. It consists of an optional package statement followed by any number of import statements followed by one or more class or interface definitions. (The package and import statements will be introduced shortly.) If more than one class or interface is defined in a Java source file, only one of them may be declared public (i.e., made available outside of the package), and the source file must have the same name as that public class or interface, plus the .java extension.
Each class or interface definition in a .java file is compiled into a separate file. These files of compiled Java byte-codes are known as "class files," and must have the same name as the class or interface they define, with the extension .class appended. For example, the class SoundEffects would be stored in the file SoundEffects.class.
Class files are stored in a directory that has the same components as the package name. If the fully qualified name of a class is david.games.tetris.SoundEffects, for example, the full path of the class file must be david/games/tetris/SoundEffects.class. This filename is interpreted relative to the Java "class path," described below. 
The Java 1.1 API consists of the classes and interfaces defined in the twenty-three packages listed in Table 2.1.
The Java interpreter knows where its standard system classes are installed, and loads them from that location as needed. By default, it looks up user-defined classes in or relative to the current directory. You can set the CLASSPATH environment variable to tell the interpreter where to look for user-defined classes. The interpreter always appends the location of its system classes to the end of the path specified by this environment variable. The entries in a class path specification should be directories or ZIP files that contain the classes. The directories in a class path specification should be colon-separated on a UNIX system, and semicolon-separated on a Windows system. For example, on a UNIX system, you might use:
setenv CLASSPATH .:/home/david/classes:/usr/local/javatools/classes.zip
On a Windows system you could use:
setenv CLASSPATH .;C:\david\classes;D:\local\javatools\classes.zip
This tells Java to search in and beneath the specified directories for non-system classes. Note that the current directory (.) is included in these paths.
You can also specify a class path to the Java interpreter with the -classpath command-line argument. Setting this option overides any path specified in the CLASSPATH environment variable. Note that the interpreter does not append the location of the system classes to the end of this path, so you must be sure to specify those system classes yourself. Finally, note that the Java compiler also recognizes and honors class paths specified with the CLASSPATH environment variable and the -classpath command-line argument.
The Java designers have proposed an Internet-wide unique package naming scheme that is based on the Internet domain name of the organization at which the package is developed.
Figure 2.1 shows some fully qualified names, which include package, class, and field components.
The top-level package names java and sun are reserved for use by Sun, of course. Developers should not define new classes within these packages.
The package statement must appear as the first statement (i.e., the first text other than comments and whitespace) in a file of Java source code, if it appears at all. It specifies which package the code in the file is part of. Java code that is part of a particular package has access to all classes (public and non-public) in the package, and to all non-private methods and fields in all those classes. When Java code is part of a named package, the compiled class file must be placed at the appropriate position in the CLASSPATH directory hierarchy before it can be accessed by the Java interpreter or other utilities.
If the package statement is omitted from a file, the code in that file is part of an unnamed default package. This is convenient for small test programs, or during development, because it means that the code can be interpreted from the current directory.
The import statement makes Java classes available to the current class under an abbreviated name. Public Java classes are always available by their fully qualified names, assuming that the appropriate class file can be found (and is readable) relative to the CLASSPATH environment variable. import doesn't actually make the class available or "read it in"; it simply saves you typing and makes your code more legible.
Any number of import statements may appear in a Java program. They must appear, however, after the optional package statement at the top of the file, and before the first class or interface definition in the file.
There are two forms of the import statement:
import package.class ; import package.* ;
The first form allows the specified class in the specified package to be known by its class name alone. Thus, this import statement allows you to type Hashtable instead of java.util.Hashtable:
The second form of the import statement makes all classes in a package available by their class name. For example, the following import statement is implicit (you need not specify it yourself) in every Java program:
It makes the core classes of the language available by their unqualified class names. If two packages imported with this form of the statement contain classes with the same name, it is an error to use either of those ambiguous classes without using its fully qualified name.
Java has the following rules about access to packages, classes, and class members. (Class members are the variables, methods, and, in Java 1.1, nested classes defined within a class). Note that the public, private, and protected keywords used in these rules will be explained in more detail in the next chapter.
The name space rules we've been describing apply to packages, classes, and the members within classes. Java also supports local variables, declared within method definitions. These local variables behave just like local variables in C--they do not have globally unique hierarchical names, nor do they have access modifiers like public and private. Local variables are quite different from class fields.