A subdomain is a part of a web address that's 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 only "example.com". Every single subdomain can have its own site and records and can also be hosted with a different company if you wish to use a certain feature that is not offered by your current service provider. An illustration for using a subdomain is if you have a company website and an online store under a subdomain where customers can purchase your products. Additionally, you can have a forum where they can comment on the products and by using subdomains as an alternative to subfolders you'll avoid any probability of all sites going down if you perform maintenance, or update one of the site scripts. Keeping your sites separated is more secure in the event of a script security breach.