You can break down activities into activity elements for more detail. For example, the activity "Production" can be subdivided into the elements "Produce power unit" and "Produce housing". Or you can create an external element for the activity "Engineering/Design", if for instance a detailed design is to be performed by an external company.
There are the same categories for activity elements as for activities themselves in the Project System:
You can create activity elements for every activity.
Activity elements contain the same information as activities:

You cannot allocate materials, or assign milestones, documents or production resources/tools to activity elements. Activity elements do not have relationships.