A subdomain is a part of a web address that is under the main domain, for instance name.example.com. Actually, even in www.example.com the "www" element is a subdomain since the fully qualified domain name is just "example.com". Each subdomain can have its own site and records and can even be hosted through a different provider if you need to use a certain feature which isn't offered by your current service provider. An example for using a subdomain is if you have a company site along with an online store under a subdomain where customers can purchase your products. You can even have a forum in which they can comment on the products and by employing subdomains as opposed to subfolders you'll avoid any risk of all websites going down if you perform maintenance, or update one of the website scripts. Keeping your sites separated is more secure in the case of a script security breach.