The AdWords Application Programming Interface (API) allows developers to use applications that:

Interact directly with the AdWords server.
Can appear throughout the Google Search Network.
Are accessible only through AdWords Editor.
Can be uploaded into the display ad builder.

The correct answer is:

Interact directly with the AdWords server.

Explanation: The Google AdWords API lets developers build applications that interact directly with the Google AdWords server.

You can read more here: https://support.google.com/adwords/answer/2375503?hl=en

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The AdWords Application Programming Interface (API) allows developers to use applications that:

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