pywikipedia is the name of a folder on your hard drive that you must install if you want to be able to create and use pywikipediabots. It refers to all of the scripts which comprise the open source pywikipedia "project".
It is a portmanteau of the words Python and Wikipedia and accurately describes how users employ Python to affect Wikipedia. Most of the scripts, originally designed for use only on Wikipedia, eventually were shown to be effective on any wiki powered by MediaWiki software. Thus, what once created strictly pywikipediabots can now be accurately thought of as powering pywikiabots, as well.