My sister was diagnosed with procrastination addiction. What does this mean?

Put it off. I will get back to you. Someone who routinely puts off initiating and completing important tasks could be said to be addicted of sorts to that behavior. It can be caused by numerous emotional problems - depression, add, avoidant personality traits/disorder, perfectionism, or even interpersonal agendas. Well-intended family members may take on an overresponsible role in rescuing/chronically remind.
Not Sure. I have never heard of this specfic term, but i assume it is being used to refer to a lifestyle in which your sister seems to depend of procrastinating in most or all areas of her life. There are several possible reasons for procrastination, although it usually comes back to the idea that a person gets some kind of benefit or comfort from the behavior, no matter how much trouble it may cause her.
No such conditon. I have not come across this term and is not a recognized diagnosis by dsm-iv-r standards. What might have happened in your sister's case is that whoever "diagnosed" this condition may have just mentioned this term in passing. The symptom of "procrastination" is more prevalent in those who have an attention deficit disorder, but is not an "addiction" to my knowledge!