A subdomain is part of a web address that is under the main domain, for example name.example.com. Technically, even in www.example.com the "www" element is a subdomain because the fully qualified domain name is only "example.com". Every subdomain could have its own web site and records and can also be hosted through a different company if you wish to use a feature that is not offered by your current provider. One example for using a subdomain is if you have a company website and an online store under a subdomain where clients can buy your products. You can even have a forum where they can comment on the products and by using subdomains instead of subfolders you will avoid any chance of all websites going down when you perform maintenance, or update one of the website scripts. Keeping your sites separated is also more secure in case there is a script security breach.