This definition tends to confuse a lot of people. Some people define tone on tone color as a single process color that shades hair to it's natural high and lowlights. True. However any type of hair color does this also.
The difference lies in that tone on tone colors have a full range of undertones included in the hair color. OK. What the hell does that mean?
Regular hair color is formulated to blend with undertones of natural hair color AFTER the peroxide developes.
Natural Undertones + Regular Hair Color = Desired Hair Color.
So the best way to further explain tone on tone hair color is with an example of what happens when you try to color blonde hair with a dark permanent color like dark brown. The end result will be somewhat green and ashy hair. If you did the same color over blonde with tone on tone hair color you wouldn't get the ashy and green tint but a natural hair color.
Regular permanant hair color has NO NATURAL UNDERTONES so don't expect a natural result when you try to cover previously lightened hair.
In the hair business to rectify this we call it "filling" the natural undertones first. Typically you would choose a color according to an undertone chart like the one below and apply that to the hair first or add to color formulation.