Adding a Forum to a Squarespace site

I'm working with someone to set up their squarespace site (url not available yet), and they'd like a forum available. From the research I've been doing here (and mostly from the link I've posted below),  we'll need to set up a subdomain of forum.url.com, which is easy enough, but what I can't find is where and how the forum software itself gets installed. Does it need to be hosted elsewhere, and the subdomain becomes a redirect with a different URL? Or is it installed in in the subdomain folder like any other built-from-scratch website? 

) 

You will need to use 3rd software to add forum, for example: vbb, xenforo...

Add forum on external server, with your sub domain, eg: forum.abc.xyz