Annotation is code about the code, that is metadata about the program itself. In other words, organized data about the code, embedded within the code itself. It can be parsed by the compiler, annotation processing tools and can also be made available at run-time too.
We have basic java comments infrastructure using which we add information about the code / logic so that in future, another programmer or the same programmer can understand the code in a better way. Javadoc is an additional step over it, where we add information about the class, methods, variables in the source code. The way we need to add is organized using a syntax. Therefore, we can use a tool and parse those comments and prepare a javadoc document which can be distributed separately.
Javadoc facility gives option for understanding the code in an external way, instead of opening the code the javadoc document can be used separately. IDE benefits using this javadoc as it is able to render information about the code as we develop. Annotations were introduced in JDK 1.5
Uses of Annotations
Annotations are far more powerful than java comments and javadoc comments. One main difference with annotation is it can be carried over to runtime and the other two stops with compilation level. Annotations are not only comments, it brings in new possibilities in terms of automated processing.
In java we have been passing information to compiler for long. For example take serialization, we have the keyword transient to tell that this field is not serializable. Now instead of having such keywords decorating an attribute annotations provide a generic way of adding information to class/method/field/variable. This is information is meant for programmers, automated tools, java compiler and runtime. Transient is a modifier and annotations are also a kind of modifiers.
More than passing information, we can generate code using these annotations. Take webservices where we need to adhere by the service interface contract. The skeleton can be generated using annotations automatically by a annotation parser. This avoids human errors and decreases development time as always with automation.
Frameworks like Hibernate, Spring, Axis make heavy use of annotations. When a language needs to be made popular one of the best thing to do is support development of frameworks based on the language. Annotation is a good step towards that and will help grow Java.
http://javapapers.com/core-java/java-annotations/