The field Site ID is limited to 25 characters. This limitation is a minor irritation as you are using {site_id} in templates because long domain names are cropped.

for example our database name convention is meteringserviceprovidercoza

Which is the domainNameTld without stops

meteringserviceprovidercoza would be an ideal site_id but we cannot use it in a template where the database is defined as {site_id} because the resulting DB name will be meteringserviceproviderco and not meteringserviceprovidercoza.

Just a thought to allow much longer site id.

The reason why we put a short Site ID is because it is also frequently used in table prefix and the MySQL table name are limited.

When you are creating a slave site in the back-end, you can always enter the domain completly with any length.
This is just a facility to create a rule that use the side ID as part of the domain name but this is not mandatory.

It is recommended to never exceed 16 characters.

The Site ID is simply a mnemonic or and identifier to retreive a website.