It stands for “computer-aided design.”
Computer-Aided Design (or CAD) is a method of visually communicating how to build an object, without sending the individual steps through text. CAD tools are typically either 2-D or 3-D modeling programs, but some may even be both. All CAD programs share the same basic set of functions that allow engineers to do three things: create computer models; check those models and make changes on them to see how they will affect the model before executing the changes in reality. A good way to think about CAD software is like layers on Photoshop—you can make alterations or enhancements without destroying what’s already there.