A subdomain is part of a web address that is under the main domain, for instance name.example.com. Actually, even in www.example.com the "www" element is a subdomain given that the fully qualified domain name is just "example.com". Every subdomain can have its own site and records and can also be hosted through a different company if you wish to use a certain feature that's not provided by your current service provider. An example for using a subdomain is if you have a company website and an online store under a subdomain where clients can buy your products. Additionally, you can have a forum in which they can talk about the products and by employing subdomains rather than subfolders you'll 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 more secure in the case of a script security breach.