A subdomain is a name added in front of a registered domain, such as
www.example.com or shop.example.com. It can point at an entirely
different host than the root domain does, which is why a site and its www
version sometimes live in different places until someone connects them on
purpose.
A subdomain usually takes a CNAME record, an alias pointing at the host's own address, which is simpler to add and to change than the A record the root of a domain requires.
For the exact rule and why the root domain cannot use the same shortcut, see connect a domain you already own.