In 2D, some heuristic examples:
$C^{\infty}$-domain: disk
Lipschitz/$C^{0,1}$-domain: Pacman, star-shaped nonconvex polygon, convex polygon
$C^{1}$-domain: consider a domain, when locally viewed, some part of boundary looks like the shape of gluing the graph of $x^2$ and $-x^2$ together at the origin. The rest of the boundary is just smooth. As you can see the derivative of $x^2$ and $-x^2$ agree at the origin, but not the second derivative.
$C^{2}$-domain: similar with $C^{1}$-domain, just gluing the graph $x^3$ and $-x^3$ together at the origin, the curve there is $C^2$.
The regularity of the domain plays an important role for the elliptic regularity for a Sobolev function:
$$
\|u\|_{W^{2,p}(\Omega)}\leq \| \Delta u\|_{L^p(\Omega)}
$$
when $\Omega$ is $C^{1,1}/C^2$ or convex. In other words, the Poisson equation $-\Delta u = f$ boundary value problem can get a regularity lifting of 2 from the data $f$, i.e., the weak differentiability goes up by 2.
- A counterexample in nonconvex domain: the regularity lifting is not true anymore. Consider in the Pacman domain $\Omega$ parametrized using polar coordinates:
$$
\Omega = \{(r,\theta): 0<r<1, 0<\theta<\pi/\alpha\}
$$
with $1/2<a<1$
then $$u = (1-r^2)r^{\alpha}\sin(\alpha \theta)$$
solves the homogeneous Dirichlet boundary problem:
$$
\begin{aligned}
-\Delta u &= (4\alpha+4)r^{\alpha}\sin(\alpha \theta)\quad \text{ in } \Omega
\\
u &= 0\quad \text{ on } \partial \Omega
\end{aligned}
$$
The right hand side data is in $L^p$, but $u\notin W^{2,p}$ for its second derivative shows strong singular behavior near the origin. If we extend the Pacman to the full disk, such solution won't be there anymore for the value
$$\lim_{\theta\to 0^+} u(r,\theta) = \lim_{\theta\to 2\pi^-} u(r,\theta)$$
I doubt we could approximate ANY open set by $C^{\infty}$-smooth domain, since we simply introduce the definition of the boundary of this open set in the Lebesgue sense. For domain that is at least Lipschitz I believe the approximation is true, if we are talking about pointwise limit.