What does the Action Type refer to?

For example running the guidance development package creates an action:

Action Name="AddClass" Type="Microsoft.Practices.RecipeFramework.Library.Actions.AddItemFromStringAction, Microsoft.Practices.RecipeFramework.Library"

What does the type refer to?

That type contains the code for the action that will be executed as part of the recipe execution.

That type contains the code for the action that will be executed as part of the recipe execution.