Firstly it says that Monogame is open-source implementation of XNA. What does it mean? -that it makes XNA open-source -or takes features of XNA and implements it itself but with same function names etc. as XNA -any other
Let's start at the beginning. To fully answer your questions you'll need to understand a bit of history.
Firstly, XNA is a set of tools provided by Microsoft that facilitates video game development. XNA is based on the .NET Framework, with versions that run on Windows, Windows Phone and XBox.
MonoGame is an open source implementation of XNA with the goal of making it truly multi-platform. It allows existing XNA developers to port their games to many other platforms using nearly identical code. So while developers used to be restricted to only Microsoft platforms they can now also deploy games on iOS, Android, Mac OS X, Linux, Windows 8 Store, Windows Phone 8, PlayStation Mobile and OUYA.
The other important thing to realise is that Microsoft is no longer supporting XNA in the future. MonoGame has become a very attractive replacement for XNA developers even for Microsoft platforms.
And is it allowed and legal?
That's a good question. While it may seem on the surface to be potentially dangerous ground, and I'm no lawyer, there appears to be plenty of evidence that Microsoft is okay with it.
For example, Skulls of the Shogun was developed using MonoGame, published by Microsoft and released on Xbox, Windows 8 and Windows Phone 8.
There are also some other examples, like TY the Tasmanian Tiger and Lee Stott (Microsoft UK Evangelist) talking about MonoGame.
can I copy any app in any app store and make my own version? What needs to be different for it to be legal?
No. You can't just copy an existing app. You'll quickly run into copyright and trademark law infringements if you do this. Even if you create a game with too many things similar to an existing game it can upset people and you may find yourself in some trouble. Believe me, I've had to deal with this before and it's not fun.
That said, copyright law can't prevent you from making your own games if you have some originality and creativity.
"Copyright does not protect the idea for a game, its name or title, or the method or methods for playing it. Nor does copyright protect any idea, system, method, device, or trademark material involved in developing, merchandising, or playing a game. Once a game has been made public, nothing in the copyright law prevents others from developing another game based on similar principles. Copyright protects only the particular manner of an author’s expression in literary, artistic, or musical form." - http://www.copyright.gov/fls/fl108.html
If you think you might be at risk I suggest doing some reading.
Secondly when I installed Monogame, SharpDX was also installed. When I searched about it, I found that SharpDX is managed DirectX (I have never worked in DirectX). What is the link between Monogame and SharpDX (or XNA and DirectX) and cant I use monogame or SharpDX separately? And what does it mean by managed DirectX?
DirectX is an API for handling tasks related to game development on Microsoft platforms.
SharpDX is a layer that sits on top of DirectX to allow it to be used in managed languages like C#.
OpenGL is an API for handling tasks related to game development on non-Microsoft platforms.
OpenTK is a layer that sits on top of OpenGL to allow it to be used in managed languages like C#.
MonoGame uses SharpDX on Microsoft platforms and OpenTK on non-Microsoft platforms.
(actually, it's not that simple but you get the idea)
Thirdly are there more cross-platform C# frameworks other than those provided by Xamarin? I cant find more.
Xamarin has pretty much cornered the market in the multi-platform C# area. The only other option I can think of is Unity but it's not really a framework, it's a full game engine.