Yes, you should "navigate" to the right directory:
cd /var/www/domain.com/conf/nginx
Then edit your file:
vim magic-config.conf
(Or nano, or whatever you prefer.)
When you finish editing your .conf file, test whether it's okay:
nginx -t
If everything is fine, reload it.
service nginx reload
Perhaps you need to sudo something; I always assume people are using root to work on their servers, but I might be wrong.