Milestones are a way to divide the fixed-price job into a series of deliverables based on your needs. They can break a larger contract into more manageable chunks. You and your freelancer should discuss and agree upon all milestone amounts, deliverables, and deadlines prior to beginning work.
Your freelancer can propose new milestones and you can check out this help article for more information on that. Please note that you will receive an email when a freelancer proposes additions or changes to milestones. Also, in the contract room, you will see an alert that a proposal is pending. Both will link you to a form where you can accept or decline the changes.
You may only fund one milestone at a time. Funds must be released on the current milestone before the next one can be activated and funded. For more information about milestones for Fixed-Price jobs, check out this help article.