A subdomain is a part of a web address which is under the main domain name, for instance name.example.com. Actually, even in www.example.com the "www" element is a subdomain given that the fully qualified domain name is only "example.com". Every single subdomain could have its own site and records and can also be hosted with a different provider if you need to use a feature that is not offered by your current service provider. An example for using a subdomain is if you have a company website as well as an online store under a subdomain where clients can acquire your products. You can even have a forum in which they can comment on the products and by using subdomains instead of subfolders you will avoid any risk of all websites going down if you perform maintenance, or update one of the site scripts. Keeping the websites separated is also less risky in the event of a script security breach.