Subdomains are features that allow you to setup "mini" websites under your domain such as:

• store.mydomain.com,
• resources.mydomain.com,
• plans.mydomains.com,
• games.mydomain.com,
• etc.

One key point to keep in mind is that, unlike domains, subdomains can be created "at will". For any domain, you can create as many subdomains as you like; you do not have to go to a registrar and pay an annual fee for each of them.