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Not a dumb question at all. A gem is a package format for a dependency in the Ruby programming language. It’s just packaged Ruby code.
It’s analogous to a Rust crate, a Elixir hex package, a NodeJS module and so on. Most languages use the word package or module these days to refer to the same concept. 20+ years ago we just called them libraries though (C and Java)
I still call them libraries, but I am old.
Greetings, fellow geezer!