A subdomain is a part of a web address which is under the main domain, 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 could have its own website and records and can also be hosted using a different provider if you want to use some feature which isn't offered by your current provider. An example for using a subdomain is if you have a company site along with an online store under a subdomain where customers can acquire your products. You can also have a forum in which they can talk about the products and by employing subdomains rather than subfolders you will avoid any probability of all websites going down if you perform maintenance, or update one of the website scripts. Keeping your sites separated is less risky in case there is a script security breach.