This tag refers to something that is outside of a particular system. In other words, it is something that is not a part of the main system and therefore can be considered "extra".
A software system has certain components making up the system and all the rest of the world is external to that system. Often systems allow to access manipulate things outside the system with or using the system. Those things are attributed as external.
Typical examples are
databases accessing external data, e.g. flat files for importing the data into the database or for exporting data.
external storage like hard drives that are not build into a computer but added via some interface technology
when accessing some script not part of the current html page, that script is external