A subdomain is part of a web address which is under the main domain name, for example name.example.com. Actually, even in www.example.com the "www" element is a subdomain since the fully qualified domain name is just "example.com". Every single subdomain can have its own website and records and can also be hosted through a different company if you wish to use a certain feature which isn't offered by your current provider. One example for using a subdomain is if you have a company site along with an online store under a subdomain where customers can purchase your products. You can also have a forum in which they can talk about the products and by employing subdomains as an alternative to subfolders you will avoid any chance of all websites going down if you perform maintenance, or update one of the site scripts. Keeping the websites separated is more secure in case of a script security breach.