A subdomain is a part of a web address which is under the main domain name, for example name.example.com. From a technical perspective, even in www.example.com the "www" part is a subdomain because the fully qualified domain name is only "example.com". Each subdomain can have its own site and records and can even be hosted using a different company if you need to use a specific feature which isn't 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 customers can purchase your products. Additionally, you can have a forum where they can comment on the products and by employing subdomains as an alternative to subfolders you will avoid any chance of all websites going down when you perform maintenance, or update one of the site scripts. Keeping your sites separated is less risky in case of a script security breach.