A subdomain is any term you want before your domain. For example you have a domain (www.x.com) and say you want to create another web page. You can create a subdomain (another.x.com) and it can be like a whole separate web page. In essence, it is a domain as well. It's a very nice feature to have.
But do not confuss a sub-domain with a Add-On Domain. They are not the same.
