A subdomain is part of a web address that's under the main domain, such as name.example.com. Technically, even in www.example.com the "www" element is a subdomain since the fully qualified domain name is only "example.com". Every single subdomain can have its own site and records and can also be hosted through a different company if you wish to use a feature that isn't provided by your current service provider. A good example for using a subdomain is if you have a company website as well as an online store under a subdomain where clients can buy your products. You can even have a forum in which they can comment on the products and by using subdomains instead of subfolders you'll avoid any probability 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.