A subdomain is part of a web address that's under the main domain, 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". Each subdomain can have its own website and records and can also be hosted using a different provider if you want to use a certain feature that's not provided by your current service provider. A good example for using a subdomain is if you have a business site and an online store under a subdomain where clients can acquire your products. You can also have a forum in which they can comment on the products and by employing subdomains as opposed to subfolders you will avoid any probability of all sites going down if you perform maintenance, or update one of the site scripts. Keeping the websites separated is more secure in the case of a script security breach.