A subdomain is part of a web address that is under the main domain, for example name.example.com. Technically, even in www.example.com the "www" part is a subdomain since the fully qualified domain name is only "example.com". Each subdomain can have its own website 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. A good example for using a subdomain is if you have a company site along with an online store under a subdomain where clients can purchase your products. You can even have a forum in which they can talk about the products and by using subdomains as opposed to subfolders you will avoid any probability of all sites going down if you perform maintenance, or update one of the website scripts. Keeping the sites separated is more secure in case of a script security breach.