A subdomain is a part of a web address that is under the main domain name, for example name.example.com. Actually, even in www.example.com the "www" part is a subdomain given that the fully qualified domain name is just "example.com". Every single subdomain can have its own website and records and can also be hosted with a different company if you need to use a certain feature that's not offered 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 customers can acquire your products. Additionally, you can have a forum in which they can discuss the products and by employing subdomains rather than subfolders you are going to avoid any chance of all websites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is also more secure in case of a script security breach.