What Does Extension Mean?
An extension, in computer operating systems, is a piece of software that enhances or "extends" the capabilities of a programming language or other applications. An extension adds extra features to an already working standalone application. Usually an extension itself is not independently functional and needs other software with which to work.
Techopedia Explains Extension
Extensions are simply files that work in combination with software to achieve a certain task that neither the extension nor the software can provide individually. Extensions are most commonly used with a programming language in the form of DLL libraries that extend the functionality of the programming language, making it understandable on a number of platforms. Similarly in Web browser applications, extensions make it easy for the program to open and play a number of different formats that it would otherwise be unable to read. In a case such as this, the Web browser is called a primary program.