A subdomain is 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 since the fully qualified domain name is just "example.com". Every subdomain could have its own web site and records and can also be hosted through a different provider if you want to use a certain feature that is not provided by your current service provider. One example for using a subdomain is if you have a business website and an online store under a subdomain where clients can acquire your products. You can even have a forum where they can discuss the products and by using subdomains as an alternative to subfolders you are going to avoid any chance of all websites going down if you perform maintenance, or update one of the site scripts. Keeping the sites separated is also more secure in the case of a script security breach.
