A subdomain is part of a web address which is under the main domain, for example name.example.com. Technically, even in www.example.com the "www" element is a subdomain given that the fully qualified domain name is only "example.com". Each subdomain could have its own website and records and can also be hosted using a different company if you need to use a specific feature that's not offered by your current provider. A good example for using a subdomain is if you have a company site as well as an online store under a subdomain where clients can acquire your products. In addition, you can have a forum where they can talk about the products and by using subdomains instead of subfolders you will avoid any chance of all sites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is also more secure in the event of a script security breach.