Conditions are generally western oriented defined diseases like eczema or diarrhea. A diagnosis in TCM refers to the underlying imbalance of the flow of the blood, qi and fluids and therefore is not the same. For example a TCM diagnosis of heart yin deficiency may present with Western conditions such as palpitations, anxiety, and insomnia.
In the context of TCM internal refers to ill health that is a result of a breaking down of the body’s natural flow. Internal conditions are almost always going to be of a more chronic nature and reflect long term diet, posture, and lifestyle conditions. External refers to a cause of disease that comes from outside the body, i.e. infection from virus, fungus, bacteria, etc. So external conditions are generally acute and inflammatory of nature.