The term "API gateway" in microservices architecture refers to a management tool that acts as a single entry point for multiple services within a system. It handles requests from clients, routing them to appropriate microservices, and managing functions like authentication, request logging, and response optimization. By providing a unified interface, an API gateway simplifies client interactions and enhances security. Additionally, it allows developers to implement policies and monitor traffic effectively, ensuring that the microservices ecosystem operates smoothly while also maintaining high performance and reliability.