A subdomain is a part of a web address that's under the main domain name, for example name.example.com. Actually, even in www.example.com the "www" element is a subdomain given that the fully qualified domain name is just "example.com". Every subdomain can have its own web site 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 provider. A good example for using a subdomain is if you have a company site along with an online store under a subdomain where customers can buy your products. You can also have a forum where they can comment on the products and by using subdomains as an alternative to subfolders you will avoid any chance of all websites going down if you perform maintenance, or update one of the site scripts. Keeping the websites separated is also more secure in case there is a script security breach.