CAM software is where a design becomes a cutting job. CAM stands for computer-aided manufacturing. CAM software takes your design and turns it into a cutting plan for the CNC router. That plan includes bit selection, feed rate, spindle speed, cutting depth, tabs, ramps, toolpath order, and other settings needed to generate G-code.
For example, a sign may need a V-carve toolpath for lettering, a pocket toolpath to remove background material, and a profile toolpath to cut the finished sign free from the board. The CAM package uses your selected bit, material thickness, feed rate, spindle RPM, and cut depth to generate the toolpath.
The final result is a G-code file or gcode file. G-code is the language your CNC controller reads. It contains commands for machine movement, cutting depth, feed rate, and sometimes spindle control or a tool change.