A subdomain is a part of a web address which is under the main domain, for instance 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". Each subdomain could have its own web site and records and can even be hosted through a different company if you wish to use some feature which is not offered by your current provider. An illustration for using a subdomain is if you have a business website along with an online store under a subdomain where clients can buy your products. You can even have a forum where they can discuss the products and by using subdomains as an alternative to subfolders you are going to avoid any chance of all sites going down if you perform maintenance, or update one of the website scripts. Keeping the sites separated is also less risky in the event of a script security breach.