An alternate name for Annwn, the Celtic Otherworld.
The meaning of fanddwy is unknown.
Notes
Caer is a Welsh name for a wall or mound for defence – a city or castle wall, a fortress.
The root to this word might be cau, to shut up, to close, to fence, to enclose with a hedge. Cue means a field enclosed with hedges. When the Britons began to build cities they built a fortified wall to surround them, which were called caer.
The name Chester is a Saxonized form of the Latin castruni, a fort (and one of the few words recognised as directly inherited from the Roman invaders), is a common prefix and suffix in English place-names, such as: Colchester, Manchester, Chesterford, Chesterton. In the Danish and Anglian districts “Chester” is replaced with “caster”, such as: Doncaster and Lancaster, but both forms are allied to casirum, a Latinization of the Celtic caer.
See also
Caer Feddwid | The Legend of King Arthur
Source
Preiddeu Annwfn | Attributed to Taliesin, c. 900