A subdomain is a part of a web address which is under the main domain, for example name.example.com. Actually, even in www.example.com the "www" part is a subdomain since the fully qualified domain name is just "example.com". Each subdomain can have its own site and records and can also be hosted with a different company if you wish to use a feature which is not offered by your current service provider. One example for using a subdomain is if you have a business site along with 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 instead of subfolders you will avoid any risk of all sites going down if you perform maintenance, or update one of the site scripts. Keeping the websites separated is also more secure in the event of a script security breach.