A subdomain is a part of a web address which is under the main domain name, for example name.example.com. Actually, even in www.example.com the "www" part is a subdomain given that the fully qualified domain name is only "example.com". Every subdomain can have its own site and records and can also be hosted through a different provider if you need to use some feature which is not offered by your current service provider. One example for using a subdomain is if you have a business website and an online store under a subdomain where customers can purchase your products. You can even have a forum where they can talk about the products and by employing subdomains instead of subfolders you are going to avoid any chance of all sites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is more secure in the case of a script security breach.