The most likely cause of the issue is that the server has not been joined to the domain. A domain is a logical group of computers and devices that share a common directory service and security policy. A domain controller is a server that manages the domain and authenticates users and computers that want to access domain resources. To log on with domain credentials, a server must be joined to the domain and registered in the directory service. If a server has not been joined to the domain, it will not be recognized or authorized by the domain controller.
References: CompTIA Server+ SK0-005 Certification Study Guide, Chapter 4, Lesson 4.3, Objective 4.3