External tool FAQ
From MoodleDocs
What is the External tool?
The external tool is an activity module supporting LTI (Learning Tools Interoperability). It is similar to SCORM as a standard for educational objects, but instead of being a package of content that is uploaded to Moodle, LTI is a way of integrating the functionality provided by another system into your course.
See also
- Using Moodle External tool forum