Hi Ram
The Document type(under Admin) is only used to define different type & subtype which can used while adding files in Document(under Home)
Now when you Add files in Document(under Home) you can use this type & subtype to categorize the document ex: I am adding files & select type - Report_Meeting & subtype - March_2014
Now lets say you have 100 document added so this Type & subtype can be used as a filter..
JAck