A subdomain is part of a web address that is under the main domain name, such as name.example.com. From a technical perspective, even in www.example.com the "www" part is a subdomain since the fully qualified domain name is only "example.com". Every single subdomain could have its own website and records and can also be hosted with a different company if you wish to use a feature that's not provided by your current service provider. An example for using a subdomain is if you have a company site and an online store under a subdomain where clients can purchase your products. You can even have a forum in which they can talk about the products and by using subdomains rather than subfolders you'll avoid any chance of all websites going down when 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.