A subdomain is one way of organizing and separating content on your site. You’re already familiar with the concept of subdomains, even if you don’t know it. A subdomain is a prefix on the URL of a domain.
Domains serve two purposes: they help to organize the site from a technical perspective, but they also serve as indications to the users that they are in a new/different space.
We have resources that demonstrate setting up subdomains and illustrate the difference between subdomains and subdirectories.