CAD (or CADD) stands for Computer-Aided Design & Drafting. It differs from both paint and "draw" programs in that measurement is central to its abilities.
A "paint" program lets you manipulate each pixel in an array of pixels that make up an image. If the overall picture shows a car and a building, there is no logical distinction between them - its just an array of colored dots you can manipulate with painting tools.
A "draw" program goes a step further - it is composed of separate entities or objects, such as circles, lines, etc. It may provide facilities to group these into "car" and "building", but the final result is still an image described in terms of its appearance on paper.
A CAD program introduces the concept of real-world measurement. A car or building can be drawn as if it were life-size, and later arranged into sheets and printed on paper at any desired scale. Valid measurements may be taken from the drawing and they should properly correspond to the real world object, if the drawing was created correctly.
Newer products have blurred these traditional distinctions. Paint programs now have "layers" which function much like separate sheets of overlaid transparent paper, but each will still contain a pixel-based image only. Both draw and paint programs have added scaling capabilities that are especially useful when printing or converting the final image for use on the web - but they still can not be used for proper measurement or structural detailing.
No. While true-scale, structurally valid drawings are the reason for CAD's existence, its use is as diverse as our customer's imaginations: