Internal gear is definitely a gear using its teeth cut in the inner surface of a cylinder and meshes with spur gears.
In its manufacturing, due to its shape, the usual hobbing machine found in spur gear creation cannot be used. Generally it is made with 
gear shaper (or equipment shaping machine) equipped with a pinion cutter. More recently, the efficiency of internal gear cutting provides been improved by a different process called skiving.
Due to the thinness of the ring, it really is sometimes difficult to produce high precision. However, gear grinding to boost precision grade is limited by the number of manufacturers and their available grinding facilities leading to very high cost.
Also, although it is normally too expensive to make helical teeth internal gears, Ever-Power has made it possible to create them simply by adopting equipment that may cut them by simply making pinion cutters rather than needing helical guides.
Normally, internal gears can be used with the same module spur gears, based on the number of teeth combinations, but it is necessary to note the possibilities of getting involute, trochoid or trimming interferences. For using Ever-Power standard share gears, please consult the PDF formatted “Specialized Info of Internal Gears” section for usable quantity of teeth combinations.
Internal gears tend to be found in applications involving planetary gear drives and gear couplings. There are three main types of planetary gear mechanisms: planetary, solar and star types. According to the type and the design of which shafts act as input and result, many variations of speed transmitting ratios and rotational directions are created.