Board Thread:Lore Discussion/@comment-104.2.72.208-20140612050328/@comment-24349111-20140612090854

First off, they aren't children of Akatosh. The Dragons, including the current Time Gods such as Akatosh, Auri-El, etc are shards from the original Time God which existed before Mundus was created. That original Time God is called "AKA". I actually wrote a whole blog about that. You can read it  here: About Aka, Lorkhan and broken Windows.

The Aedra are the Et'Ada who sacrificed parts of themselves to create Nirn & Mundus. The Dragons, as far as we know, did not sacrifice anything, so it's safe to say that they are not Aedra.