A subdomain is a domain located below a second level domain (e.g. hoststar.at) in the domain hierarchy.
The www preceding a domain is also a subdomain. Hoststar also uses my. as a subdomain in My Panel.
Subdomains are very useful if you want to highlight certain services and make them more easily or directly accessible (e.g. shop.yourdomain.extension for your online shop), or you can use subdomains to create a direct division between your branches (e.g. wien.yourdomain.extension).
There are basically no limits placed on subdomains, which is why Hoststar does not restrict the number of subdomains per hosting subscription either.