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API stands for Application Programming Interface, i.e. API is the way for an application to interact with certain system/application/library/etc. For example, there are API's for OS (WinAPI), API's for other applications (like databases) and for specific libraries (for example, image processing), etc. APIs are usually developed in a form consumable by a client application.
API is an acronym for Application Programming Interface. It enables communication and data exchange between two separate software systems. A software system implementing an API contains functions/sub-routines which can be executed by another software system.