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Which is best practice using a single identity or multiple identity domains ?

We have 4 OIC instances in our projects, 3 are non-production instances and 1 is production instance. As of now we have provisioned 3(non-prod) OIC instances under default domain. Now the question is do we need to create new domain for production and provision the OIC prod instance there? If yes what is the domain type we need to use for new identity domain? We also created all the 8(dev, test & PROD) ERP instances under default domain, will all these 8 ERP instances be available under newly created identity domain ?

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