A subdomain is part of a web address which is under the main domain, such as 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 only "example.com". Every single subdomain can have its own website and records and can also be hosted using a different company if you wish to use some feature which is not offered by your current provider. An example for using a subdomain is if you have a business website as well as an online store under a subdomain where clients can buy your products. You can even have a forum in which they can discuss the products and by using subdomains as opposed to subfolders you'll avoid any chance of all sites going down if you perform maintenance, or update one of the site scripts. Keeping your websites separated is also more secure in case of a script security breach.