ActiveX is a Microsoft technology which is essentially like the OCX/VBX specification that allows programmers to create components that can be combined like building blocks into applications. The components use the OLE (Object Linking and Embedding) feature of Windows to allow data to be shared between applications.
You might, for example, have a small component that displayed and edited a special type of graphics or sound file. You can embed this is in a document within another application to give that application the capability to display and edit that kind of file. You've probably already seen it in Microsoft Office apps, such as Word and Excel, which can handle simple vector graphics using an MS Draw component.
ActiveX is the incarnation of this technology that works with distributed applications over the Internet, and it's supported by Microsoft's Internet Explorer browser. The idea is to allow Internet content providers to offer interactive elements, like some sort of spreadsheet or a special graphic or anything else they might imagine.
In many ways it's a competitor for Java, but in other ways it's a bit different. You can supply interactive components in Java, but Java is a very general language. ActiveX, in its present state, appears to be a specification and a bundle of components that lets you do little glitzy things with a Web site viewed by Internet Explorer -- a scrolling marquee, for example, or some kind of animation.
From a political point of view, ActiveX is a Microsoft proprietary standard among the largely open standards of the Internet.
- Neale Morison