The sugar in the onion is caramelising

It's just a process of slowly cooking them on a low heat, they'll naturally go quite sweet after a while without having to add sugar.

It's just slowly cooking chopped onions in a pan until they are a deep brown and very soft and sweet. If you've ever had french onion soup, that's basically just caramelized onions in broth.

Caramelization is the process of sugars browning due to high heat. The actual reactions that are happening is a combination of sugars and their chains breaking down into smaller compounds and those smaller compounds recombining into other compounds, all these new compounds gives caramelized foods their distinctive colour and taste.

When making caramel the sugar liquification happens often in high enough temperatures for caramelization to occur. The process of sauteeing/high temperature cooking onions long enough involves the same exact reactions. In onions the bit longer chain sugars that dont taste sweet are broken down into simple sugars thus producing the sweet taste of caramelized onions and the further reactions produce the caramel colour and taste.

Tldr: caramelization is a group of chemical reactions and 'caramel' is basically a taste and colour that results from it