API testing is where you test different components of the API to ensure it will work. As part of integration testing to determine if they meet expectations for functionality, reliability, performance, and security. Usually, this consists of making requests to a single or multiple API endpoints and then validating a response.
Testing can be performance, security, functional correctness, or status related depending on what it is your testing. Not to be confused with mocking, which is where you build a mock API server to see how the API will perform.