A subdomain is a part of a web address that's under the main domain, for instance name.example.com. Actually, even in www.example.com the "www" element is a subdomain given that the fully qualified domain name is just "example.com". Each subdomain can have its own web site and records and can also be hosted through a different provider if you want to use a specific feature which isn't offered by your current provider. An illustration for using a subdomain is if you have a company site as well as an online store under a subdomain where clients can acquire your products. Additionally, you can have a forum where they can comment on the products and by using subdomains rather than subfolders you are going to avoid any risk of all websites going down when you perform maintenance, or update one of the site scripts. Keeping the websites separated is also less risky in case of a script security breach.