A subdomain is a 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 because the fully qualified domain name is just "example.com". Every single subdomain could have its own website and records and can even be hosted using a different company if you wish to use some feature that isn't offered by your current provider. An example for using a subdomain is if you have a company site and an online store under a subdomain where customers can buy your products. You can also have a forum where they can discuss the products and by employing subdomains as an alternative to subfolders you will avoid any risk of all websites going down if you perform maintenance, or update one of the website scripts. Keeping the websites separated is also less risky in case there is a script security breach.