A subdomain is a part of a web address which is 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 just "example.com". Each subdomain could have its own site and records and can even be hosted using a different company if you want to use a certain feature that's not provided by your current provider. An illustration for using a subdomain is if you have a company website as well as an online store under a subdomain where customers can purchase your products. You can also have a forum where they can discuss the products and by employing subdomains rather than subfolders you will avoid any chance of all websites going down if you perform maintenance, or update one of the site scripts. Keeping your sites separated is less risky in the case of a script security breach.