A subdomain is part of a web address that's under the main domain, such as name.example.com. Actually, even in www.example.com the "www" part is a subdomain given that the fully qualified domain name is only "example.com". Each subdomain can have its own website and records and can also be hosted using a different company if you want to use a specific feature which is not provided by your current service provider. An example for using a subdomain is if you have a business website and an online store under a subdomain where customers can purchase your products. You can even have a forum in which they can discuss the products and by employing 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 the sites separated is also more secure in the case of a script security breach.