It's a word put together from Chillin' and Relaxing. It actually means the same. If somebody should cool down you could say he or she has to relax or has to chill out. If you decide not to choose between these to, or you haven't made a decision while you already have to say the word, you say 'Chillax'.
It could also mean having a good time with your friends.
Boys who enjoy yaoi (a genre in Japan that contains sexual and/or romantic relations between two men); literally translates to "rotten boy"; corresponding female : fujoshi