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Can a literal in RDF be seen as an "entity"? Coming from a background in Domain-Driven Design and Entity-Relationship Model this feels a bit weird.

According to https://www.w3.org/TR/rdf11-concepts/#resources-and-statements this is indeed the case:

Any IRI or literal denotes something in the world (the "universe of discourse"). These things are called resources. Anything can be a resource, including physical things, documents, abstract concepts, numbers and strings; the term is synonymous with "entity" as it is used in the RDF Semantics specification [RDF11-MT].

RDF11-MT does not contain a definition of the term "entity".

Then, https://kgbook.org/#sssec-directedelg does not explicitly mention the term "entity" for literals:

The RDF model defines different types of nodes, including Internationalized Resource Identifiers (IRIs) [Dürst and Suignard, 2005] which allow for global identification of entities on the Web; literals, which allow for representing strings (with or without language tags) and other datatype values (integers, dates, etc.); and blank nodes, which are anonymous nodes that are not assigned an identifier (for example, rather than create internal identifiers like EID15, EID16, in RDF, we have the option to use blank nodes).

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Yes, this is indeed the case, even when considering the latest RDF Semantics. The Semantic web has a different paradigm from typical software development and has different intentions. I.e. one of the big differences you will encounter is that of open world assumption (assumes partial knowledge and non-existence is only assumed when explicitly stated that it does not exist, i.e. not finding a customer may mean that the customer does exit but is just not known) vs closed world assumption (assume everything is known and if ,for example, a customer is not found in a database, it means the customer is does not exist). Traditional software development like DDD and ERD make use of the closed world assumption whereas the semantic web mostly use the open world assumption.

Due these differences the semantic web has different terminology. I have written about it here. The best possible advise I can give you (as someone who also came from a DDD and ERD background), forget what you know and read each specification, post, article wrt Semantic web carefully. It does make sense, however you need to change how you think before it will make sense.

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