A subdomain is a part of a web address that is under the main domain name, for example name.example.com. Technically, even in www.example.com the "www" element is a subdomain because the fully qualified domain name is only "example.com". Each subdomain can have its own website and records and can even be hosted with a different provider if you wish to use some feature which isn't offered by your current provider. An illustration for using a subdomain is if you have a company website along with an online store under a subdomain where clients can purchase your products. You can even have a forum where they can comment on the products and by employing subdomains as an alternative to subfolders you'll avoid any chance of all sites going down if you perform maintenance, or update one of the site scripts. Keeping the sites separated is less risky in case there is a script security breach.