An indirect water heater gets its heat indirectly from another source - usually a hot water boiler.
In an immersed coil installation, there will be a hot water tank that contains a coil-type heat exchanger that's "fed" by the boiler. In a tankless coil installation, the water-heating coil is located inside the boiler, eliminating the need for a hot water storage tank.
An indirect water heater can be very efficient, especially during winter months when the boiler is running anyway. But it's important to remember that the efficiency of this water heater is affected by the efficiency of the attached heating appliance.