Addon domains means you can host multiple domain in one single hosting account, each domain can have it's own set of content, email accounts etc. while sharing the resources allocated for the hosting account.
These are not subdomains but full domains IE www.domain.com.They show up as subdomains of your main account for your own organizational purposes only .
To add an addon domain
1. Login to your cpanel.
2. In “Domains” section
3. Click on “Addon domains”
It will ask you for following details :
New Domain Name: Place a domain name you want to add as addon domain name.
Subdomain/FTP Username: You can setup your desired subdomain name, ftp user name for a addon domain name
Document Root: It will by default fetch a directory for a addon domain name. If you want to change the path you can place new directory name here.
Password: A FTP account password for a addon domain name can be setup from here.
4. Click on “Add domain”
It will add a new addon domain name in your main account.