A subdomain is a part of a web address that is under the main domain, such as name.example.com. Actually, even in www.example.com the "www" element is a subdomain because the fully qualified domain name is only "example.com". Each subdomain could have its own site and records and can even be hosted using a different company if you want to use a feature that isn't provided by your current service provider. One example for using a subdomain is if you have a company site as well as an online store under a subdomain where clients can buy your products. You can also have a forum where they can comment on the products and by using subdomains as opposed to subfolders you are going to avoid any risk of all sites going down when you perform maintenance, or update one of the website scripts. Keeping the websites separated is also more secure in case there is a script security breach.