A subdomain is a part of a web address that's under the main domain, for instance name.example.com. Actually, even in www.example.com the "www" part is a subdomain since the fully qualified domain name is just "example.com". Every subdomain could have its own site and records and can also be hosted with a different provider if you need to use a specific feature that is 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 purchase your products. You can even have a forum in which they can talk about the products and by using subdomains instead of subfolders you'll avoid any probability of all websites going down if you perform maintenance, or update one of the site scripts. Keeping your websites separated is less risky in the case of a script security breach.