What Is VLSM

Cisco :: Subnetting According To Number Of Hosts VLSM

you can subnet to meet the number of networks required, or you can subnet to meet the number of hosts required. In which circumstances would you use either one? or are they both the same? am kinda confused.Is subnetting according to the number of hosts VLSM? and subnetting according to the number of networks required is not VLSM subnetting? Also I'm on CCNA 1 chapter 6, if the other CCNA 2, 3 and 4 has chapters explaining subnetting better cos It's totally confusing me atm.Also, is my understanding correct, when a company wants a LAN made, a network designer see's how many hosts they require in each of their LANS and then chooses an appropriate address class and subnets it? and to connect the LAN to the internet he implements NAT on the router that connects to the internet, and that router translates the internal addressing scheme that was created into a public registered IP address from an ISP? Also does he just make the address up? for example if he decides to use class C, he just picks any random number in the class C range and subnets it?