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