Externalization means to put something outside of its original borders. Especially to put a human function outside of the human body. The opposite of internalization.
In a more abstract sense, by inventing excuses, we can externalize the guilt associated with our actions.
In Freudian psychology, externalization is a neurotic defense mechanism, where the sufferer "projects" his own internal characteristics onto the outside world, particularly onto other people. For example, a patient who is overly argumentative might instead perceive others as argumentative and himself blameless.