Final answer:
The I/O boundary is the interface for communication between the processing system and external entities. Databases are situated internally because they manage and process data within the system.
Step-by-step explanation:
The I/O boundary (Input/Output boundary) refers to the interface in a computing system at which the communication takes place between the processing system and the external environment, which includes users, other systems, or devices. In terms of databases, the I/O boundary demarcates the separation between the database system itself—where data is processed and managed—and the environment where the data is input or output. Databases are typically situated on the internal side of the I/O boundary because they are part of the system that directly manages the data.