A subdomain is part of a web address that's under the main domain name, for example 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 could have its own site and records and can also be hosted using a different company if you wish to use a specific feature which is not provided by your current provider. A good example for using a subdomain is if you have a business site as well as an online store under a subdomain where clients can buy your products. You can also have a forum where they can discuss the products and by employing subdomains as opposed to subfolders you'll avoid any risk of all websites going down when you perform maintenance, or update one of the site scripts. Keeping your websites separated is also more secure in case of a script security breach.