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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.
Developers can make requests by including calls in the code of their applications. The syntax is described in the documentation of the application being called. By providing a means for requesting program services, an API is said to grant access to or open an application. Building an application with no APIs, says Josh Walker, an analyst at Forrester Research Inc. in Cambridge, Mass., is basically like building a house with no doors.