A subdomain is a part of a web address that 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 given that the fully qualified domain name is only "example.com". Each subdomain can have its own site and records and can also be hosted with a different company if you need to use a feature that isn't provided by your current provider. A good example for using a subdomain is if you have a company site as well as an online store under a subdomain where clients can buy your products. You can also have a forum where they can comment on the products and by employing subdomains rather than subfolders you are going to avoid any chance of all sites going down if you perform maintenance, or update one of the website scripts. Keeping your sites separated is more secure in case of a script security breach.