“Integrated graphics” or an “integrated GPU” these days almost always refers to a small(er)/weak(er) GPU that is included in the CPU itself.

From the perspective of the operating system, a ‘discrete’ GPU and the ‘integrated’ GPU are both rendering devices that it can access. In a laptop with discrete graphics, both of these are usually able to output to the built in display, so a game or other application can choose to render to either one. That’s usually where you see things getting confused, as the BIOS or OS might be configured with the integrated graphics chip as the first/default rendering device.

It’s also possible to do pure software rendering using only the CPU. Nobody actually wants to do this these days for real time applications, since it is painfully slow. But it is an option.