Trees grow up and out. As they do so their roots must also grow and in doing so two basic types of tree roots begin to grow. These are called woody and nonwoody roots. The woody roots are what hold the tree into the ground and they also are where the other type of root, the nonwoody, begins. The nonwoody roots (feeder roots) are what absorb water and nutrients and they spread far and wide but usually are near the surface of the soil and there are many more of them under the canopy of the tree than beyond. There are a few around the base of the tree but the vast majority are around the dripline of the tree and as the canopy grows so does the outward expansion of the feeder roots.
In your case what the directions mean is to apply the castings at the actual dripline. Imagine you drew a circle on the ground the same diameter as the canopy of the tree. You know that there are some feeder roots beyond the circle and you also know that there are a lot more feeder roots inside the circle. And you want to feed as many of the feeder roots as possible, so, what do you do to feed the most roots with the limited amount of castings that you have? What you do is apply the castings, determined by how much you have, in a band on that imaginary circle under the canopy. The more castings you have the wider the band.
I know this was a long drawn out explanation but I just wanted folks to understand as much as possible about fruit tree fertilization. You do the same thing with fertilizer as you do with the worm castings. Most people just fertilize around the base of the tree and maybe 3 or 4 feet from the trunk at most, leaving the vast majority of the tree unfertilized.
