The Yocto project is a set of tools that allow someone to build and use an embedded Linux image.
From the Yocto web site:
The Yocto Project is an open source collaboration project that provides templates, tools and methods to help you create custom Linux-based systems for embedded products regardless of the hardware architecture.
The main web site is at: http://www.yoctoproject.org/
The Linux Foundation announced the Yocto Project in October, 2010 at [Embedded Linux Conference Europe 2010]
Yocto technology derives from Poky Linux, which was a branch of Open Embedded