A subdomain is part of a web address that's under the main domain, for instance name.example.com. Technically, even in www.example.com the "www" part is a subdomain because 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 want to use a feature that isn't provided by your current provider. A good 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 also have a forum in which they can discuss the products and by employing subdomains as opposed to subfolders you are going to avoid any risk of all websites going down if you perform maintenance, or update one of the website scripts. Keeping the sites separated is also more secure in the event of a script security breach.