Xref
Short answer
An external reference — a DWG file inserted into another DWG that updates automatically when the source changes.
An Xref (external reference, XREF command) is a DWG file inserted into another DWG by reference rather than copy. When the source updates, all hosting drawings see the change. Xrefs are how production sets are organized — base survey, civil layout, utility plan all live as separate DWGs and are xref'd into a final sheet. Automation that walks a project folder almost always has to handle xref attach/detach and resolve relative paths.