An addon domain is a fully functional domain that can be created from within your control panel. Think of it as having multiple hosting packages all sharing the same control panel. You can give them email addresses, forwarders, and more the same way you do for your main domain on the account.
The addon domain will exist inside the public_html directory of your account with the folder name you choose for it upon creation.
www.domain.com is a domain name. A subdomain is anything that replaces the www in a domain name.
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