A subdomain is a part of a web address that is under the main domain, such as 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 even be hosted using a different company if you need to use a specific feature that isn't provided by your current service provider. A good example for using a subdomain is if you have a company site and an online store under a subdomain where clients can acquire your products. You can also have a forum where they can discuss the products and by using subdomains instead of subfolders you are going to avoid any risk of all sites going down if you perform maintenance, or update one of the website scripts. Keeping the websites separated is more secure in case there is a script security breach.