An Addon Domain or an Added Domain is an option that allows you within the margins of a single web hosting account to create more than one website. This way, if you want to have more websites, you can place them all under your current web hosting account. These websites will share the parameters and resources of the said account, but will not share their contents.
The website will be placed in a subfolder, which will be masked by the domain name. This way the content of that subfolder will appear as a separate website.