A subdomain is a subsection of your web site that exists as a subdirectory in your public_html folder. Subdomains use a prefix in conjunction with the domain name. For example, if the registered domain name was example.com, the subdomain will be prefix.example.com.
Subdomains can be useful for creating unique user accounts for "vanity domains." This is helpful if, for example, you have a blog, or any other type of web site that uses a domain specifically titled for a user.
Note: It is important to remember that it takes time for the subdomain to become recognized by other computers on the web. Visitors will not be able to view your subdomain immediately; the process takes anywhere from 2 hours to a week.