What is Derived Table?
If you are coming from sql background then i would say “Views”.
For Non-DB guys, it’s a logical table* based on some physical table(s).
It is created using SQL statement with expressions and joins.
It do not store data as it’s not a physical table hence every time a report uses this table SQL query is executed adding little bit overhead (might lead to performance issue).
You cannot add indexes on this table as it’s logical.
You should only use this feature if you need something quick. I would say it is temorary solution not the long term.
List of couple is good articles on Derived Tables.
* table : Structure where data is stored.