An electric guitar produces sound by transferring the vibration of the steel string through a specialized magnet (the pickup) and moves that sound through an instrument cable and into an amplifier. With electric guitars there are two main camps that pickups will fall into. A single-coil pickup and a humbucker pickup.
The single-coil pickup was first designed and manufactured in the mid-1930’s to give guitar players a louder volume when playing in a large big band. Although, there was a lot of electrical ‘hum’ that would occur as a result of electrical interference. This was mitigated with the advent of the Humbucker (or twin coiled guitar pickup), which utilized another coiled pick-up to reverse the signal polarity and cancel the hum.
Active Pickups vs. Passive Pickups
The electrical signal produced by a set of magnetic pickups is very small. Therefore, when amplifiers are cranked in volume or add more gain and the signal distorts, you will notice many passive pickups have a electrical buzzing (or Hum) when the guitar is not being played. The amount of electrical background noise to the sound of the vibrating strings is called the signal-to-noise ratio. Many passive pickups have this issue, some to greater degrees, but they do not detract from the guitar signal or imply an inherent lack of quality in sound. This is simply a flaw in the physics of guitar amplification.
However, some pickups can utilize an external power source to increase the signal-to-noise ratio, which also changes some of the other characteristics of the guitar's amplified tone. These are called Active Pickups.
Some extra reading from Sweetwater: https://www.sweetwater.com/insync/active-vs-passive-pickups-whats-the-difference-which-is-best/