In Ignition we refer to libraries in several places, but it just means a collection of similar items. These could be a collection of images, scripting functions, components, or more.
We often talk about layers in Ignition in reference to the software stack. Each layer is a piece that works because of the layers below it. For example, the Platform layer of Ignition requires the VM (Java) layer below it to function, and is required by the Module layer above it.