A subdomain is part of a web address that's under the main domain, for instance 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 website and records and can even be hosted through a different company if you want to use a feature which isn't provided by your current provider. One example for using a subdomain is if you have a company website as well as an online store under a subdomain where clients can acquire your products. You can even have a forum where they can comment on the products and by employing subdomains instead of subfolders you'll avoid any risk of all websites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is also less risky in case of a script security breach.