Your CPU isn’t just the main cores that process things. It’s basically the entire damn computer on one chip at this point. Integrated graphics means it just has an actual GPU (the parallel computey kind) on the same chip.

Now that Intel and AMD both make dedicated GPUs it’s literally the exact same stuff from their dedicated cards, just cut down to the bare minimum to fit in the package.

The CPU has cores for parallel processing like a GPU does (though not as fast or numerous; think hundreds vs thousands). These are not to be confused with the main CPU cores meant for fast single-threaded performance. Intel calls them "execution cores."

The bigger difference for performance is that integrated graphics share RAM with the CPU while GPUs have their own ultra-fast dedicated RAM for the type of work they do.

https://superuser.com/questions/732616/how-does-integrated-graphics-card-work

See the picture in the comment for the question. The short answer is there's a section of the die that has a "graphics chip" etched into it instead of something else.