An addon domain is a fully functional domain that will work out of a folder in your main site's public_html FTP directory. They can be setup within cPanel under domains.
This means that you can run multiple sites from the same webhosting account.
For example, you may have an account setup for www.mydomain.com. If your plan allows it, you could also run mydomain.com.au from the same account by adding mydomain.com.au as an addon domain.
The directory for mydomain.com.au would be public_html/mydomain.com.au.
