A subdomain is a part of a web address which is under the main domain name, 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 only "example.com". Each subdomain can have its own site and records and can even be hosted using a different provider if you wish to use a feature which isn't provided by your current provider. A good example for using a subdomain is if you have a company site and an online store under a subdomain where clients can buy your products. You can even 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 site scripts. Keeping your websites separated is also less risky in the case of a script security breach.