A subdomain is a part of a web address that is under the main domain name, for instance name.example.com. Technically, even in www.example.com the "www" element is a subdomain since the fully qualified domain name is just "example.com". Each subdomain could have its own site and records and can also be hosted through a different company if you need to use a certain feature which isn't provided by your current provider. An example for using a subdomain is if you have a company site along with an online store under a subdomain where clients can purchase your products. Additionally, you can have a forum where they can talk about the products and by using subdomains rather than subfolders you'll avoid any risk of all sites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is also more secure in case there is a script security breach.