A subdomain is a part of a web address which is under the main domain, for instance name.example.com. Technically, even in www.example.com the "www" part is a subdomain given that the fully qualified domain name is only "example.com". Each subdomain can have its own site and records and can even be hosted using a different provider if you wish to use a feature that's not provided by your current provider. An example for using a subdomain is if you have a business website as well as an online store under a subdomain where customers can acquire your products. Additionally, you can have a forum where they can discuss the products and by using subdomains rather than subfolders you are going to avoid any chance of all websites going down when you perform maintenance, or update one of the website scripts. Keeping the websites separated is more secure in case of a script security breach.