What is the term for software that reads and processes code in standard text files?

The term that describes software which reads and processes code in standard text files is "Interpreter." An interpreter translates high-level programming languages into machine code, executing instructions line-by-line or statement-by-statement at runtime. This allows the programmer to see immediate results and debug the code more interactively.

In contrast, a compiler converts the entire code into machine code before execution, thus preparing a complete executable file that can run independently. An assembler translates assembly language to machine code, typically for low-level programming, while a debugger is a tool that helps identify and fix errors in code rather than processing the code itself. The interpreter's immediate execution capabilities make it particularly useful in scenarios involving scripting languages and during the development process when rapid feedback is valuable.