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Subterranean (Sub - Latin for under. Terra - Latin for earth or ground) refers to everything underground. In particular it refers to Nods Subterranean technology which allows them to dominate the underworld in much the same way the GDI dominates space and is just as strategically vital - in other words, while GDI ruled above the world, Nod ruled the underworld.
Underground structures and tunnels had existed long before even the First Tiberium War. Bunkers and tunnels had long been widely used and throughout the Tiberium wars many buildings had all or part of their structure below ground to protect them against attack.
Second Tiberium War
Subterranean vehicles, however, were invented by Nod sometime after the first as a counter to GDI's growing dominance of the skies and would play a major part in the Second Tiberium War. Nod moved many of their operations underground (literally) to their newly built global tunnel system. This included some of their command vessels, such as the "Montauk" which used it to operate across the globe unmolested by GDI's Ion Cannons or their superior air force.
They also developed several vehicles which could travel underground independently of the tunnel system by drilling their way to their destinations only to appear right where their enemy least welcomed them.
One of their new vehicles was the Subterranean APC, which could ferry troops undetected across all terrain. Another was the much dreaded "Devil's Tongue flame tank" which took many unlucky GDI patrols by complete surprise by popping out of the ground right in their midst, crushing and immolating everything around them. Needless to say, the prospect of the sudden appearance of subterranean vehicles - disgorging fanatical soldiers and gouts of flame - was greatly feared by GDI soldiers, making them very effective psychological weapons.
GDI's response was to deploy highly sensitive Mobile Sensor Arrays, the only thing capable of detecting subterranean vehicles at the time, to strategic locations and pave the ground in and around their bases with concrete which was impenetrable by subterranean units (and also allowed units to move faster). Also, EMP Cannon in Firestorm Crisis can disrupt systems of subterranean units, force them back to groud and immoblize them for a limited duration.
Third Tiberium War
By the time of the Third Tiberium War, however, subterranean vehicles had become untenable. Tiberium drastically changed prior to this war and massive growths of underground Tiberium began forming which were too dangerous to bore through.
Large swathes of the earth became too dangerous to cross, even above ground, while others required subterranean vehicles to make circuitous detours around any tiberium fields. These onerous restrictions led to subterranean vehicles being all but abandoned during this conflict. The Subterranean APC was replaced by the much speedier Reckoner and the Devil's Tongue was replaced by a more advanced version of the original flame tank.
Subterranean structures, bunkers and tunnels, however, did not need to travel around and so did not have this problem. With routine maintenance to keep tiberium growths away, tiberium generally posed no threat to structures unless it was part of a deliberate attack. They continued to be widely used throughout this war, examples include: the GDI's Ion cannon control and Nod's War factory and Redeemer engineering facility as well as the reinforcement bays.
By the time of the Ascension Conflict, subterranean technology experienced a renaissance and a massive revival. The Tiberium Control Network had cleared away uncontrolled Tiberium deposits, making the underground world safe for travel once again. Not only that, the Tiberium had conveniently left a vast network of caverns behind, ready to be exploited.
In short, Nod is free to rule the underworld a time once more.
Nod now relies on their vast subterranean network more than ever. It is used to deliver their Crawlers to battlefields, many of their units can now travel underground to avoid detection and conflict until just the right moment, and it forms the basis of several of their support powers such as the Risen Monolith and Subterranean Strike.
Amongst their burrowing units are the Tyrant, Scorpion tank, Spider Tank and Black Widow. The Reckoner can also burrow filling the roles of both the Subterranean APC and its predecessor. Several Defense Class structures can also burrow allowing for ambushes..