Operating system is the layer between the Hardware and the User's Application. It gives an abstraction of features to use for developing Windows Applications.
OS can be used like an Extended Machine and a Resource Manager.
WIN32 API is the interface that is provided for windows developers.
OS provides abstractions like Processes, Threads, Memory Management, File Systems, I/O Devices, Deadlocks, Virtualization and Security.
Modern Operating Systems by Andrew Tanenbaum