A subdomain is part of a web address that's under the main domain, for example 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 subdomain can have its own site and records and can also be hosted using a different company if you want to use a feature which isn't provided by your current provider. A good example for using a subdomain is if you have a company website along with an online store under a subdomain where customers can purchase your products. Additionally, you can have a forum in which they can discuss the products and by using subdomains as an alternative to subfolders you will avoid any probability of all sites going down when you perform maintenance, or update one of the website scripts. Keeping your sites separated is also less risky in case of a script security breach.