Below are few major attributes of a subdomain that would make you understand what is a subdomain in its true sense.
What is a Subdomain?
As Wikipedia says:
In the Domain Name System (DNS) hierarchy, a subdomain is a domain that is part of a larger domain.
- SEE ALSO: How to Create a SEO Friendly Website
Sub domains are basically a new domain as a whole. Say you register a domain name yourdomainname.com. Now this is your domain that you use with your blog/website.
You kept using it until you realise you need to expand your blog. This is the time where you could either register a new domain as a whole or use a sub domain of your currently existing domain i.e yourdomainname.com
You now wish to create a forum for your new website. For doing that, you have 2 good options.
1- Either you could get a new domain name, say "your-domain-name-forum.com"
2- Use a sub domain for currently existing domain as: forum.your-domain-name.com
Both strategies would serve the purpose when it comes to the functioning of your new forum. Though, there can be a huge difference with their reputation in Search engine.
Sub domains retain of your blog such as your Alexa rank. Sub domains are also considered to be fairly better when it comes to passing your root domains page rank.
Few Example of BloggingeHow's Subdomains:
How to Setup a Subdomain?
Subdomains are fairly easy to setup and often gets activated with in few hours of DNS settings. You simply have to go login to your main/root (yourdomainmame.com) control pannel and look for DNS (Domain Name Severs) settings options.
Once you get to that, you would see NSevers (Name Severs) option available. There, you simply have to point your subdomain to your main domains IP Address.
I'll post few tutorials on how you could play with Bluehost subdomains. Hope this post helped you understand what exactly a sub domain is.