Addiction is a physical dependency upon a substance, in this case, tobacco. This happens when a person uses tobacco regularly and their body becomes physically dependent upon the substance.
Tolerance is how ones body is able to put up with a substance. When a substance is used for the first time, the effects of that substance are seen after only a small dose of the substance. However, as the substance is used more and more often, the body using it becomes more able to handle the substance. Therefore, it takes more of the substance for the person's body to be affected in the same (or often times, desired) way.
Withdrawal occurs when the person stops using the substance. His/her body has become used to using the substance, and when he/she tries to quit using it, the body goes through a stage of withdrawal since it is used to having a certain amount of the substance.