A subdomain is part of a web address that is under the main domain, for instance 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 website and records and can also be hosted using a different company if you want to use a feature that is not offered by your current provider. An illustration for using a subdomain is if you have a business website and an online store under a subdomain where clients can acquire your products. You can even have a forum in which they can talk about the products and by employing subdomains as opposed to subfolders you will avoid any risk of all websites going down if you perform maintenance, or update one of the website scripts. Keeping your sites separated is also less risky in case of a script security breach.