Google is trying hard to lock people out of blocking Ads. Here is a work around if AdAway is not able to write to your hosts file.
- On your rooted device: Start a local terminal application on your Android device
- Type: su
- Type: mount -o rw,remount /system
- Type: rm /system/etc/hosts
- Type: ln -s /data/data/hosts /system/etc/hosts
- Type: mount -o ro,remount /system
Now run AdAway and it should work properly.