This term is used to refer to the process, practice and tools for using computer to design and engineer systems. It goes hand-in-hand with CAM, and and robot builder worth his salt will have at least one CAD system.
CAD allows you to visualise, and modify as well as set down an idea without having to machine or build it. You may be able to spot potential flaws, or better solutions through this process. It also allows you to create blueprints and technical drawings to work from when building robots. It may allow you to make sure your measurements are correct and the parts will assemble as you would have liked, as well as building a bill of materials and costing the result. There is a very important motto in engineering - measure twice, cut once. CAD allows you to ensure those measurements actually work out.
Major commercial CAD and engineering systems include ProEngineer, SolidWorks and AutoCad.
There are smaller 2D CAD systems which are great for organising furniture, planning houses and offices - as well as architectural CAD systems - engineering and architectural CAD applications can vary by a great deal, but it is clear that there is a large common ground.
Some companies with modular furniture systems, or large ranges actually offer their own cut down CAD system with a library of their items, so you can then put in your rooms boundaries, and plan the organisation of furniture - these can be fairly useful.
Some CAD systems are more orientated at artwork and game characters than engineering - tools like Blender, Maya and 3D Studio Max fall into this category. They do not have the facilities for creating mechanical constraints, 3D Part mating and measurements, but instead offer more pliable features for freeform deformation, mesh editing as well as texturing and mapping.
A combination of the different systems means you could use one to focus on the engineering aspects and mechanisms, and the other to focus on the aesthetic aspects. Although many of the engineering CAD systems now have NURBs and bezier patches in them as well - so they could be used to model curved surfaces.
In its current incarnation, LDraw System is actually closer to the mesh based systems - in that each part is simply that. Parts are built from primitives like studs (or lugs) and so on, then places together. They do not snap based on any part to part constraints, but are simply placed in the 3D coordinate space related to the origin.
Orion is involved in some investigation to create a parametric Lego CAD system, which does have real engineering mate systems and deals with models in a way that is aware of their physical properties, and not simply a boundary mesh.
Lego also offer their own application, the designer, which is a bit more intelligent in terms of snapping onto studs etc, but has a very limited library of parts, and does not lend itself well to Technic Lego or robots. While easier to use than the LDraw System systems, it has nowhere near the power and flexibility of them.
EDA systems are aimed at electronics, and allow you to design schematics, and possibly even simulate or test them - to make sure they function as expected or find faults before production. You can even use these to simulate component faults and see how the circuit behaves. These are known as Schematic Capture or EDA packages.
SPICE is a simulation tool only, but projects like gEDA and programs like Multisim offer the full WYSIWIG editor and simulation. Verilog is a system used both to model behaviour of complex logic devices, and sometimes actually program them - FPGAs. It is a programming language, but you may find visual representations of its behaviour. One well known implementation is the free Icarus simulator. Multisim also can be augmented with a verilog simulator.
OrionRobots are currently interested in getting information regarding CAD and EDA systems which can run on the move on phones and tablets. If anyone knows of any EDA or CAD systems that run on one- Please use twitter to let us know.