Ruby is a scripting language. You can use it on the web through CGI, or you can use a framework like Ruby on Rails to make things easier than just using naked Ruby, in the same way that you can use a PHP framework to take some of the tedium out of writing PHP.
To just run Ruby scripts you don't need anything special except the Ruby interpreter. To run Ruby on Rails you need to install Ruby, RubyGems, and the Rails framework, and optionally a web server like lighttpd (preferred) or Apache.
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