A subdomain is a part of a web address that's under the main domain name, such as name.example.com. Actually, even in www.example.com the "www" part is a subdomain given that the fully qualified domain name is just "example.com". Every subdomain could have its own web site and records and can also be hosted using a different provider if you need to use a feature that isn't provided by your current provider. One example for using a subdomain is if you have a business website and an online store under a subdomain where clients can purchase your products. You can even have a forum in which they can discuss the products and by employing subdomains instead of subfolders you'll avoid any chance of all websites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is also more secure in case there is a script security breach.