These days it's pretty simple to achieve with systemd-resolved. I've been playing with split DNS and VPNs for a while and it seems it's a solved problem on Linux, finally.

The big hurdle is understanding the concept of search domain vs routing domain and the interaction with resolved and NetworkManager.

Funny, systemd is like an opposite of wireguard in design goal. I believe the UNIX way would be /etc/hosts but some way to sync these within clients. Like etcd or whatever.

An issue with /etc/hosts is that it is just one file and you do not want etcd to own all the config you would need to use something like NIS instead.

Ah yes, my bad. /etc/nsswitch.conf (which is also a Linux-ism but BSDs have something similar) supports LDAP. However, an advantage of /etc/hosts is the low latency since its not networked, while LDAP would result to overhead. Still, I believe that would be a suitable alternative. There's some non-bloated alternatives to OpenLDAP, and also an option could be caching.

Yeah that’s what we used, but not all Linux supports it, and that still leaves non-Linux as well. But hosts files are universal.