ICANN opens domains to creativity

I wonder how this could slow down the internet. As we know, to reach a website, we need to translate the name and find the IP address. But, the DNS is organized in a hierarchy way, that the top level domains are well listed.

If we allow the new names, how could we make a Domain Name Server to reach all over the world? And if we make one that is exclusive for the new domains, and we put in the US, the connection in chine will be as low as if they dont have a domains server at all.

My question is, do they ( ICANN) is taking the technical issues? If yes, how do they deal with it?