diff --git a/cmd/otf-agent/main.go b/cmd/otf-agent/main.go
index 310e513d3..0cfd258be 100644
--- a/cmd/otf-agent/main.go
+++ b/cmd/otf-agent/main.go
@@ -7,8 +7,8 @@ import (
 
 	cmdutil "github.com/leg100/otf/cmd"
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/logr"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/pkg/errors"
 	"github.com/spf13/cobra"
 )
@@ -27,7 +27,7 @@ func main() {
 func run(ctx context.Context, args []string) error {
 	var (
 		loggerCfg *logr.Config
-		cfg       *agent.ExternalConfig
+		cfg       *remoteops.AgentConfig
 	)
 
 	cmd := &cobra.Command{
@@ -41,7 +41,7 @@ func run(ctx context.Context, args []string) error {
 				return err
 			}
 
-			agent, err := agent.NewExternalAgent(cmd.Context(), logger, *cfg)
+			agent, err := remoteops.NewAgent(cmd.Context(), logger, *cfg)
 			if err != nil {
 				return fmt.Errorf("unable to start agent: %w", err)
 			}
@@ -54,7 +54,7 @@ func run(ctx context.Context, args []string) error {
 	cmd.SetArgs(args)
 
 	loggerCfg = logr.NewConfigFromFlags(cmd.Flags())
-	cfg = agent.NewExternalConfigFromFlags(cmd.Flags())
+	cfg = remoteops.NewAgentConfigFromFlags(cmd.Flags())
 
 	if err := cmdutil.SetFlagsFromEnvVariables(cmd.Flags()); err != nil {
 		return errors.Wrap(err, "failed to populate config from environment vars")
diff --git a/cmd/otfd/main.go b/cmd/otfd/main.go
index 1ba5864b5..732df8149 100644
--- a/cmd/otfd/main.go
+++ b/cmd/otfd/main.go
@@ -7,12 +7,12 @@ import (
 
 	cmdutil "github.com/leg100/otf/cmd"
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/authenticator"
 	"github.com/leg100/otf/internal/daemon"
 	"github.com/leg100/otf/internal/github"
 	"github.com/leg100/otf/internal/gitlab"
 	"github.com/leg100/otf/internal/logr"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/pkg/errors"
 	"github.com/spf13/cobra"
 )
@@ -103,7 +103,7 @@ func parseFlags(ctx context.Context, args []string, out io.Writer) error {
 	cmd.Flags().StringVar(&cfg.GoogleIAPConfig.Audience, "google-jwt-audience", "", "The Google JWT audience claim for validation. If unspecified then validation is skipped")
 
 	loggerConfig = logr.NewConfigFromFlags(cmd.Flags())
-	cfg.AgentConfig = agent.NewConfigFromFlags(cmd.Flags())
+	cfg.RemoteOpsConfig = remoteops.NewConfigFromFlags(cmd.Flags())
 
 	if err := cmdutil.SetFlagsFromEnvVariables(cmd.Flags()); err != nil {
 		return errors.Wrap(err, "failed to populate config from environment vars")
diff --git a/internal/agent/agent_test.go b/internal/agent/agent_test.go
deleted file mode 100644
index 6b1f92b2b..000000000
--- a/internal/agent/agent_test.go
+++ /dev/null
@@ -1,15 +0,0 @@
-package agent
-
-import (
-	"testing"
-
-	"github.com/go-logr/logr"
-	"github.com/stretchr/testify/assert"
-	"github.com/stretchr/testify/require"
-)
-
-func TestNewAgent_SetDefaultConcurrency(t *testing.T) {
-	agent, err := NewAgent(logr.Discard(), nil, Config{})
-	require.NoError(t, err)
-	assert.Equal(t, 5, agent.Concurrency)
-}
diff --git a/internal/daemon/config.go b/internal/daemon/config.go
index df9456314..0cd26e809 100644
--- a/internal/daemon/config.go
+++ b/internal/daemon/config.go
@@ -4,10 +4,10 @@ import (
 	"errors"
 
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/authenticator"
 	"github.com/leg100/otf/internal/configversion"
 	"github.com/leg100/otf/internal/inmem"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/leg100/otf/internal/tokens"
 )
 
@@ -16,7 +16,7 @@ var ErrInvalidSecretLength = errors.New("secret must be 16 bytes in size")
 // Config configures the otfd daemon. Descriptions of each field can be found in
 // the flag definitions in ./cmd/otfd
 type Config struct {
-	AgentConfig                  *agent.Config
+	RemoteOpsConfig              *remoteops.Config
 	CacheConfig                  *inmem.CacheConfig
 	GithubHostname               string
 	GithubClientID               string
@@ -46,9 +46,9 @@ type Config struct {
 }
 
 func ApplyDefaults(cfg *Config) {
-	if cfg.AgentConfig == nil {
-		cfg.AgentConfig = &agent.Config{
-			Concurrency: agent.DefaultConcurrency,
+	if cfg.RemoteOpsConfig == nil {
+		cfg.RemoteOpsConfig = &remoteops.Config{
+			Concurrency: remoteops.DefaultConcurrency,
 		}
 	}
 	if cfg.CacheConfig == nil {
diff --git a/internal/daemon/daemon.go b/internal/daemon/daemon.go
index babaeff7a..c4501e458 100644
--- a/internal/daemon/daemon.go
+++ b/internal/daemon/daemon.go
@@ -10,7 +10,6 @@ import (
 	"github.com/go-logr/logr"
 	"github.com/gorilla/mux"
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/api"
 	"github.com/leg100/otf/internal/auth"
 	"github.com/leg100/otf/internal/authenticator"
@@ -30,6 +29,7 @@ import (
 	"github.com/leg100/otf/internal/organization"
 	"github.com/leg100/otf/internal/pubsub"
 	"github.com/leg100/otf/internal/releases"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/leg100/otf/internal/repohooks"
 	"github.com/leg100/otf/internal/run"
 	"github.com/leg100/otf/internal/scheduler"
@@ -71,7 +71,7 @@ type (
 
 		Handlers []internal.Handlers
 
-		agent process
+		opsDaemon process
 	}
 
 	process interface {
@@ -277,9 +277,9 @@ func New(ctx context.Context, logger logr.Logger, cfg Config) (*Daemon, error) {
 		RunService:          runService,
 	})
 
-	agent, err := agent.NewAgent(
-		logger.WithValues("component", "agent"),
-		agent.LocalClient{
+	remoteopsDaemon, err := remoteops.NewDaemon(
+		logger.WithValues("component", "remoteops"),
+		remoteops.InProcClient{
 			TokensService:               tokensService,
 			WorkspaceService:            workspaceService,
 			VariableService:             variableService,
@@ -289,7 +289,7 @@ func New(ctx context.Context, logger logr.Logger, cfg Config) (*Daemon, error) {
 			RunService:                  runService,
 			LogsService:                 logsService,
 		},
-		*cfg.AgentConfig,
+		*cfg.RemoteOpsConfig,
 	)
 	if err != nil {
 		return nil, err
@@ -400,7 +400,7 @@ func New(ctx context.Context, logger logr.Logger, cfg Config) (*Daemon, error) {
 		ConnectionService:           connectionService,
 		Broker:                      broker,
 		DB:                          db,
-		agent:                       agent,
+		opsDaemon:                   remoteopsDaemon,
 	}, nil
 }
 
@@ -511,12 +511,12 @@ func (d *Daemon) Start(ctx context.Context, started chan struct{}) error {
 	case <-d.Broker.Started():
 	}
 
-	// Run local agent in background
+	// Run remote ops daemon in background
 	g.Go(func() error {
-		// give local agent unlimited access to services
-		agentCtx := internal.AddSubjectToContext(ctx, &internal.Superuser{Username: "local-agent"})
-		if err := d.agent.Start(agentCtx); err != nil {
-			return fmt.Errorf("agent terminated: %w", err)
+		// give daemon unlimited access to services
+		daemonCtx := internal.AddSubjectToContext(ctx, &internal.Superuser{Username: "remoteops-daemon"})
+		if err := d.opsDaemon.Start(daemonCtx); err != nil {
+			return fmt.Errorf("remote ops daemon terminated: %w", err)
 		}
 		return nil
 	})
diff --git a/internal/integration/cluster_test.go b/internal/integration/cluster_test.go
index 2d92cbe05..b095a637f 100644
--- a/internal/integration/cluster_test.go
+++ b/internal/integration/cluster_test.go
@@ -3,8 +3,8 @@ package integration
 import (
 	"testing"
 
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/daemon"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/leg100/otf/internal/sql"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
@@ -30,7 +30,7 @@ func TestCluster(t *testing.T) {
 
 	// start agent, instructing it to connect to otfd2,
 	// add --debug flag, which dumps info that this test relies upon
-	otfd2.startAgent(t, ctx, org.Name, agent.ExternalConfig{Config: agent.Config{Debug: true}})
+	otfd2.startAgent(t, ctx, org.Name, remoteops.AgentConfig{Config: remoteops.Config{Debug: true}})
 
 	// create root module, setting otfd1 as hostname
 	root := newRootModule(t, otfd1.Hostname(), org.Name, "dev")
diff --git a/internal/integration/daemon_helpers_test.go b/internal/integration/daemon_helpers_test.go
index 8943dba85..375cc3b33 100644
--- a/internal/integration/daemon_helpers_test.go
+++ b/internal/integration/daemon_helpers_test.go
@@ -11,7 +11,6 @@ import (
 
 	"github.com/google/uuid"
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/auth"
 	"github.com/leg100/otf/internal/cli"
 	"github.com/leg100/otf/internal/configversion"
@@ -23,6 +22,7 @@ import (
 	"github.com/leg100/otf/internal/organization"
 	"github.com/leg100/otf/internal/pubsub"
 	"github.com/leg100/otf/internal/releases"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/leg100/otf/internal/run"
 	"github.com/leg100/otf/internal/sql"
 	"github.com/leg100/otf/internal/state"
@@ -419,7 +419,7 @@ func (s *testDaemon) createAgentToken(t *testing.T, ctx context.Context, organiz
 
 // startAgent starts an external agent, configuring it with the given
 // organization and configuring it to connect to the daemon.
-func (s *testDaemon) startAgent(t *testing.T, ctx context.Context, organization string, cfg agent.ExternalConfig) {
+func (s *testDaemon) startAgent(t *testing.T, ctx context.Context, organization string, cfg remoteops.AgentConfig) {
 	t.Helper()
 
 	// Configure logger; discard logs by default
@@ -436,7 +436,7 @@ func (s *testDaemon) startAgent(t *testing.T, ctx context.Context, organization
 	cfg.APIConfig.Token = string(token)
 	cfg.APIConfig.Address = s.Hostname()
 
-	agent, err := agent.NewExternalAgent(ctx, logger, cfg)
+	agent, err := remoteops.NewAgent(ctx, logger, cfg)
 	require.NoError(t, err)
 
 	ctx, cancel := context.WithCancel(ctx)
diff --git a/internal/integration/run_cancel_test.go b/internal/integration/run_cancel_test.go
index 4d5934254..c9c7d17bc 100644
--- a/internal/integration/run_cancel_test.go
+++ b/internal/integration/run_cancel_test.go
@@ -8,8 +8,8 @@ import (
 	"testing"
 
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/releases"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/leg100/otf/internal/variable"
 	"github.com/leg100/otf/internal/workspace"
 	"github.com/stretchr/testify/require"
@@ -49,8 +49,8 @@ func TestIntegration_RunCancel(t *testing.T) {
 
 	// start an external agent (it's the only way to specify a separate bin
 	// directory currently).
-	daemon.startAgent(t, ctx, org.Name, agent.ExternalConfig{
-		Config: agent.Config{TerraformBinDir: bins},
+	daemon.startAgent(t, ctx, org.Name, remoteops.AgentConfig{
+		Config: remoteops.Config{TerraformBinDir: bins},
 	})
 
 	// create workspace specifying that it use an external agent.
diff --git a/internal/integration/run_error_test.go b/internal/integration/run_error_test.go
index 56c22777e..74f39d487 100644
--- a/internal/integration/run_error_test.go
+++ b/internal/integration/run_error_test.go
@@ -8,7 +8,7 @@ import (
 	"testing"
 
 	"github.com/leg100/otf/internal"
-	"github.com/leg100/otf/internal/agent"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/leg100/otf/internal/run"
 	"github.com/leg100/otf/internal/workspace"
 	"github.com/stretchr/testify/require"
@@ -24,7 +24,7 @@ func TestRunError(t *testing.T) {
 
 	// create a daemon and start an agent
 	daemon, org, ctx := setup(t, nil)
-	daemon.startAgent(t, ctx, org.Name, agent.ExternalConfig{})
+	daemon.startAgent(t, ctx, org.Name, remoteops.AgentConfig{})
 
 	// two tests: one run on the daemon, one via the agent.
 	tests := []struct {
diff --git a/internal/integration/sandbox_test.go b/internal/integration/sandbox_test.go
index 7a228f210..02cbda7d4 100644
--- a/internal/integration/sandbox_test.go
+++ b/internal/integration/sandbox_test.go
@@ -5,8 +5,8 @@ import (
 	"os/exec"
 	"testing"
 
-	"github.com/leg100/otf/internal/agent"
 	"github.com/leg100/otf/internal/daemon"
+	"github.com/leg100/otf/internal/remoteops"
 	"github.com/stretchr/testify/assert"
 	"github.com/stretchr/testify/require"
 )
@@ -23,7 +23,7 @@ func TestSandbox(t *testing.T) {
 	require.NoError(t, err)
 
 	daemon, org, ctx := setup(t, &config{Config: daemon.Config{
-		AgentConfig: &agent.Config{
+		RemoteOpsConfig: &remoteops.Config{
 			Sandbox: true,
 			Debug:   true,
 		},
diff --git a/internal/logs/api.go b/internal/logs/api.go
index f5d5365dd..2cc12d576 100644
--- a/internal/logs/api.go
+++ b/internal/logs/api.go
@@ -24,7 +24,7 @@ func (a *api) addHandlers(r *mux.Router) {
 	signed.Use(internal.VerifySignedURL(a.Verifier))
 	signed.HandleFunc("/runs/{run_id}/logs/{phase}", a.getLogs).Methods("GET")
 
-	// client is typically an external agent
+	// client is typically otf-agent
 	r = r.PathPrefix(otfapi.DefaultBasePath).Subrouter()
 	r.HandleFunc("/runs/{run_id}/logs/{phase}", a.putLogs).Methods("PUT")
 }
diff --git a/internal/agent/client.go b/internal/remoteops/client.go
similarity index 85%
rename from internal/agent/client.go
rename to internal/remoteops/client.go
index 23f09afda..b2895c45e 100644
--- a/internal/agent/client.go
+++ b/internal/remoteops/client.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"context"
@@ -17,12 +17,12 @@ import (
 )
 
 var (
-	_ client = (*LocalClient)(nil)
-	_ client = (*remoteClient)(nil)
+	_ client = (*InProcClient)(nil)
+	_ client = (*rpcClient)(nil)
 )
 
 type (
-	// client allows the agent to communicate with the server endpoints.
+	// client allows the daemon to communicate with the server endpoints.
 	client interface {
 		GetWorkspace(ctx context.Context, workspaceID string) (*workspace.Workspace, error)
 		ListEffectiveVariables(ctx context.Context, runID string) ([]*variable.Variable, error)
@@ -43,8 +43,8 @@ type (
 		internal.PutChunkService
 	}
 
-	// LocalClient is the client for an internal agent.
-	LocalClient struct {
+	// InProcClient is a client for in-process communication with the server.
+	InProcClient struct {
 		tokens.TokensService
 		variable.VariableService
 		state.StateService
@@ -55,8 +55,8 @@ type (
 		logs.LogsService
 	}
 
-	// remoteClient is the client for an external agent.
-	remoteClient struct {
+	// rpcClient is a client for communication via RPC with the server.
+	rpcClient struct {
 		*otfapi.Client
 		otfapi.Config
 
@@ -78,15 +78,13 @@ type (
 	logsClient      = logs.Client
 )
 
-// New constructs a client that uses http to remotely invoke OTF
-// services.
-func newClient(config ExternalConfig) (*remoteClient, error) {
+// New constructs a client that uses RPC to remotely invoke OTF services.
+func newClient(config AgentConfig) (*rpcClient, error) {
 	api, err := otfapi.NewClient(config.APIConfig)
 	if err != nil {
 		return nil, err
 	}
-
-	return &remoteClient{
+	return &rpcClient{
 		Client:          api,
 		stateClient:     &stateClient{Client: api},
 		configClient:    &configClient{Client: api},
diff --git a/internal/agent/config.go b/internal/remoteops/config.go
similarity index 72%
rename from internal/agent/config.go
rename to internal/remoteops/config.go
index cc555dc0f..6048508e0 100644
--- a/internal/agent/config.go
+++ b/internal/remoteops/config.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"github.com/leg100/otf/internal/api"
@@ -6,18 +6,20 @@ import (
 )
 
 type (
-	// Config is configuration for an agent.
+	// Config is configuration for a remote operations daemon.
 	Config struct {
-		Organization    *string // only process runs belonging to org
-		External        bool    // dedicated agent (true) or integrated into otfd (false)
+		Organization    *string // only perform operations for a particular org
 		Concurrency     int     // number of workers
 		Sandbox         bool    // isolate privileged ops within sandbox
 		Debug           bool    // toggle debug mode
 		PluginCache     bool    // toggle use of terraform's shared plugin cache
 		TerraformBinDir string  // destination directory for terraform binaries
+
+		isAgent bool // external agent process (true) or integrated into otfd (false)
 	}
-	// ExternalConfig is configuration for an external agent
-	ExternalConfig struct {
+	// AgentConfig is configuration for an agent, i.e. a remote operations
+	// daemon that communicates with the server via RPC.
+	AgentConfig struct {
 		APIConfig api.Config
 
 		Config
@@ -33,8 +35,8 @@ func NewConfigFromFlags(flags *pflag.FlagSet) *Config {
 	return &cfg
 }
 
-func NewExternalConfigFromFlags(flags *pflag.FlagSet) *ExternalConfig {
-	cfg := ExternalConfig{
+func NewAgentConfigFromFlags(flags *pflag.FlagSet) *AgentConfig {
+	cfg := AgentConfig{
 		Config: *NewConfigFromFlags(flags),
 	}
 	flags.StringVar(&cfg.APIConfig.Address, "address", api.DefaultAddress, "Address of OTF server")
diff --git a/internal/agent/agent.go b/internal/remoteops/daemon.go
similarity index 70%
rename from internal/agent/agent.go
rename to internal/remoteops/daemon.go
index 5fda95bdc..5edbb69b4 100644
--- a/internal/agent/agent.go
+++ b/internal/remoteops/daemon.go
@@ -1,7 +1,4 @@
-/*
-Package agent provides a daemon capable of running remote operations on behalf of a user.
-*/
-package agent
+package remoteops
 
 import (
 	"context"
@@ -30,8 +27,8 @@ var (
 	}
 )
 
-// agent processes runs.
-type agent struct {
+// daemon performs remote operations
+type daemon struct {
 	Config
 	logr.Logger
 	releases.Downloader
@@ -43,13 +40,15 @@ type agent struct {
 	envs []string // terraform environment variables
 }
 
-// NewAgent is the constructor for an agent
-func NewAgent(logger logr.Logger, app client, cfg Config) (*agent, error) {
+// NewDaemon constructs a remote operations daemon, which is either in-process,
+// part of otfd, or an external process, otf-agent, communicating with the
+// server via RPC.
+func NewDaemon(logger logr.Logger, app client, cfg Config) (*daemon, error) {
 	if cfg.Concurrency == 0 {
 		cfg.Concurrency = DefaultConcurrency
 	}
-	if cfg.External && cfg.Organization == nil {
-		return nil, fmt.Errorf("external agent requires organization to be specified")
+	if cfg.isAgent && cfg.Organization == nil {
+		return nil, fmt.Errorf("an agent requires a specific organization to be specified")
 	}
 	if cfg.Sandbox {
 		if _, err := exec.LookPath("bwrap"); errors.Is(err, exec.ErrNotFound) {
@@ -60,8 +59,7 @@ func NewAgent(logger logr.Logger, app client, cfg Config) (*agent, error) {
 	if cfg.Debug {
 		logger.V(0).Info("enabled debug mode")
 	}
-
-	agent := &agent{
+	dmon := &daemon{
 		client:     app,
 		Config:     cfg,
 		Logger:     logger,
@@ -70,21 +68,19 @@ func NewAgent(logger logr.Logger, app client, cfg Config) (*agent, error) {
 		spooler:    newSpooler(app, logger, cfg),
 		terminator: newTerminator(),
 	}
-
 	if cfg.PluginCache {
 		if err := os.MkdirAll(PluginCacheDir, 0o755); err != nil {
 			return nil, fmt.Errorf("creating plugin cache directory: %w", err)
 		}
-		agent.envs = append(agent.envs, "TF_PLUGIN_CACHE_DIR="+PluginCacheDir)
+		dmon.envs = append(dmon.envs, "TF_PLUGIN_CACHE_DIR="+PluginCacheDir)
 		logger.V(0).Info("enabled plugin cache", "path", PluginCacheDir)
 	}
-
-	return agent, nil
+	return dmon, nil
 }
 
-// NewExternalAgent constructs an external agent, which communicates with otfd
-// via http
-func NewExternalAgent(ctx context.Context, logger logr.Logger, cfg ExternalConfig) (*agent, error) {
+// NewAgent constructs a remote operations daemon that communicates with the
+// server via RPC. It is typically invoked as a separate process, `otf-agent`.
+func NewAgent(ctx context.Context, logger logr.Logger, cfg AgentConfig) (*daemon, error) {
 	// Sends unauthenticated ping to server
 	app, err := newClient(cfg)
 	if err != nil {
@@ -100,16 +96,15 @@ func NewExternalAgent(ctx context.Context, logger logr.Logger, cfg ExternalConfi
 
 	// Ensure agent only processes runs for this org
 	cfg.Organization = internal.String(at.Organization)
-	// Mark agent as external.
-	cfg.External = true
+	// This is an agent.
+	cfg.isAgent = true
 
-	return NewAgent(logger, app, cfg.Config)
+	return NewDaemon(logger, app, cfg.Config)
 }
 
-// Start starts the agent daemon and its workers
-func (a *agent) Start(ctx context.Context) error {
+// Start starts the daemon and its workers
+func (a *daemon) Start(ctx context.Context) error {
 	g, ctx := errgroup.WithContext(ctx)
-
 	g.Go(func() error {
 		if err := a.spooler.start(ctx); err != nil {
 			// only report error if context has not been canceled
@@ -119,7 +114,6 @@ func (a *agent) Start(ctx context.Context) error {
 		}
 		return nil
 	})
-
 	g.Go(func() error {
 		for i := 0; i < a.Concurrency; i++ {
 			w := &worker{a}
@@ -135,6 +129,5 @@ func (a *agent) Start(ctx context.Context) error {
 			}
 		}
 	})
-
 	return g.Wait()
 }
diff --git a/internal/remoteops/daemon_test.go b/internal/remoteops/daemon_test.go
new file mode 100644
index 000000000..134640c74
--- /dev/null
+++ b/internal/remoteops/daemon_test.go
@@ -0,0 +1,15 @@
+package remoteops
+
+import (
+	"testing"
+
+	"github.com/go-logr/logr"
+	"github.com/stretchr/testify/assert"
+	"github.com/stretchr/testify/require"
+)
+
+func TestNewDaemon_SetDefaultConcurrency(t *testing.T) {
+	daemon, err := NewDaemon(logr.Discard(), nil, Config{})
+	require.NoError(t, err)
+	assert.Equal(t, 5, daemon.Concurrency)
+}
diff --git a/internal/agent/environment.go b/internal/remoteops/environment.go
similarity index 86%
rename from internal/agent/environment.go
rename to internal/remoteops/environment.go
index 81f79032b..8069cf695 100644
--- a/internal/agent/environment.go
+++ b/internal/remoteops/environment.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"context"
@@ -19,9 +19,6 @@ import (
 
 // environment provides an execution environment for a run, providing a working
 // directory, services, capturing logs etc.
-//
-// TODO: this is a pointless abstraction; refactor it out into worker's
-// handle() func.
 type environment struct {
 	client
 	logr.Logger
@@ -41,10 +38,10 @@ type environment struct {
 func newEnvironment(
 	ctx context.Context,
 	logger logr.Logger,
-	agent *agent,
+	dmon *daemon,
 	run *run.Run,
 ) (*environment, error) {
-	ws, err := agent.GetWorkspace(ctx, run.WorkspaceID)
+	ws, err := dmon.GetWorkspace(ctx, run.WorkspaceID)
 	if err != nil {
 		return nil, errors.Wrap(err, "retrieving workspace")
 	}
@@ -59,17 +56,17 @@ func newEnvironment(
 	// via an environment variable.
 	//
 	// NOTE: environment variable support is only available in terraform >= 1.2.0
-	token, err := agent.CreateRunToken(ctx, tokens.CreateRunTokenOptions{
+	token, err := dmon.CreateRunToken(ctx, tokens.CreateRunTokenOptions{
 		Organization: &ws.Organization,
 		RunID:        &run.ID,
 	})
 	if err != nil {
 		return nil, errors.Wrap(err, "creating run token")
 	}
-	envs := internal.SafeAppend(agent.envs, internal.CredentialEnv(agent.Hostname(), token))
+	envs := internal.SafeAppend(dmon.envs, internal.CredentialEnv(dmon.Hostname(), token))
 
 	// retrieve variables and add them to the environment
-	variables, err := agent.ListEffectiveVariables(ctx, run.ID)
+	variables, err := dmon.ListEffectiveVariables(ctx, run.ID)
 	if err != nil {
 		return nil, fmt.Errorf("retrieving workspace variables: %w", err)
 	}
@@ -83,20 +80,20 @@ func newEnvironment(
 	writer := logs.NewPhaseWriter(ctx, logs.PhaseWriterOptions{
 		RunID:  run.ID,
 		Phase:  run.Phase(),
-		Writer: agent,
+		Writer: dmon,
 	})
 
 	env := &environment{
 		Logger:     logger,
-		Downloader: agent.Downloader,
-		client:     agent,
+		Downloader: dmon.Downloader,
+		client:     dmon,
 		out:        writer,
 		workdir:    wd,
 		variables:  variables,
 		ctx:        ctx,
 		runner:     &runner{out: writer},
 		executor: &executor{
-			Config:  agent.Config,
+			Config:  dmon.Config,
 			version: run.TerraformVersion,
 			out:     writer,
 			envs:    envs,
@@ -124,7 +121,7 @@ func (e *environment) execute() (err error) {
 		fmt.Fprintln(e.out, "Debug mode enabled")
 		fmt.Fprintln(e.out, "------------------")
 		fmt.Fprintf(e.out, "Hostname: %s\n", hostname)
-		fmt.Fprintf(e.out, "External agent: %t\n", e.External)
+		fmt.Fprintf(e.out, "External agent: %t\n", e.isAgent)
 		fmt.Fprintf(e.out, "Sandbox mode: %t\n", e.Sandbox)
 		fmt.Fprintln(e.out, "------------------")
 		fmt.Fprintln(e.out)
diff --git a/internal/agent/executor.go b/internal/remoteops/executor.go
similarity index 97%
rename from internal/agent/executor.go
rename to internal/remoteops/executor.go
index 354be9c64..73a68fa20 100644
--- a/internal/agent/executor.go
+++ b/internal/remoteops/executor.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"bytes"
@@ -45,7 +45,7 @@ type (
 	executionOption func(*execution)
 )
 
-// sandboxIfEnabled sandboxes the execution process *if* the agent is configured
+// sandboxIfEnabled sandboxes the execution process *if* the daemon is configured
 // with a sandbox.
 func sandboxIfEnabled() executionOption {
 	return func(e *execution) {
diff --git a/internal/agent/executor_test.go b/internal/remoteops/executor_test.go
similarity index 99%
rename from internal/agent/executor_test.go
rename to internal/remoteops/executor_test.go
index fcbfb24d8..21f7e5f3c 100644
--- a/internal/agent/executor_test.go
+++ b/internal/remoteops/executor_test.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"bytes"
diff --git a/internal/remoteops/remoteops.go b/internal/remoteops/remoteops.go
new file mode 100644
index 000000000..8b9479c2d
--- /dev/null
+++ b/internal/remoteops/remoteops.go
@@ -0,0 +1,2 @@
+// Package remoteops performs remote operations, i.e. terraform plan, apply, etc.
+package remoteops
diff --git a/internal/agent/spooler.go b/internal/remoteops/spooler.go
similarity index 92%
rename from internal/agent/spooler.go
rename to internal/remoteops/spooler.go
index c4d18b73c..d63bd5677 100644
--- a/internal/agent/spooler.go
+++ b/internal/remoteops/spooler.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"context"
@@ -130,12 +130,12 @@ func (s *spoolerDaemon) handleEvent(ev pubsub.Event) error {
 }
 
 func (s *spoolerDaemon) handleRun(event pubsub.EventType, run *otfrun.Run) {
-	// (a) external agents only handle runs with agent execution mode
-	// (b) internal agents only handle runs with remote execution mode
+	// (a) agents only handle runs with agent execution mode
+	// (b) non-agents only handle runs with remote execution mode
 	// (c) if neither (a) nor (b) then skip run
-	if s.External && run.ExecutionMode != workspace.AgentExecutionMode {
+	if s.isAgent && run.ExecutionMode != workspace.AgentExecutionMode {
 		return
-	} else if !s.External && run.ExecutionMode != workspace.RemoteExecutionMode {
+	} else if !s.isAgent && run.ExecutionMode != workspace.RemoteExecutionMode {
 		return
 	}
 
diff --git a/internal/agent/spooler_test.go b/internal/remoteops/spooler_test.go
similarity index 95%
rename from internal/agent/spooler_test.go
rename to internal/remoteops/spooler_test.go
index d28295c35..0450da106 100644
--- a/internal/agent/spooler_test.go
+++ b/internal/remoteops/spooler_test.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"context"
@@ -66,8 +66,8 @@ func TestSpooler_handleEvent(t *testing.T) {
 			wantRun: true,
 		},
 		{
-			name:   "internal agents skip agent-mode runs",
-			config: Config{External: false},
+			name:   "non-agent daemon skip agent-mode runs",
+			config: Config{isAgent: false},
 			event: pubsub.Event{
 				Payload: &run.Run{
 					ExecutionMode: workspace.AgentExecutionMode,
@@ -76,8 +76,8 @@ func TestSpooler_handleEvent(t *testing.T) {
 			wantRun: false,
 		},
 		{
-			name:   "external agents handle agent-mode runs",
-			config: Config{External: true},
+			name:   "agent daemon handle agent-mode runs",
+			config: Config{isAgent: true},
 			event: pubsub.Event{
 				Payload: &run.Run{
 					ExecutionMode: workspace.AgentExecutionMode,
diff --git a/internal/agent/spooler_test_helper.go b/internal/remoteops/spooler_test_helper.go
similarity index 97%
rename from internal/agent/spooler_test_helper.go
rename to internal/remoteops/spooler_test_helper.go
index db5a1a71e..0aeacb924 100644
--- a/internal/agent/spooler_test_helper.go
+++ b/internal/remoteops/spooler_test_helper.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"context"
diff --git a/internal/agent/steps.go b/internal/remoteops/steps.go
similarity index 99%
rename from internal/agent/steps.go
rename to internal/remoteops/steps.go
index 618b081fc..f6d52a52c 100644
--- a/internal/agent/steps.go
+++ b/internal/remoteops/steps.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"bytes"
diff --git a/internal/agent/terminator.go b/internal/remoteops/terminator.go
similarity index 97%
rename from internal/agent/terminator.go
rename to internal/remoteops/terminator.go
index 08b6d2e9b..6cd08cd88 100644
--- a/internal/agent/terminator.go
+++ b/internal/remoteops/terminator.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import "sync"
 
diff --git a/internal/agent/testdata/badexe b/internal/remoteops/testdata/badexe
similarity index 100%
rename from internal/agent/testdata/badexe
rename to internal/remoteops/testdata/badexe
diff --git a/internal/agent/testdata/dir/file b/internal/remoteops/testdata/dir/file
similarity index 100%
rename from internal/agent/testdata/dir/file
rename to internal/remoteops/testdata/dir/file
diff --git a/internal/agent/testdata/dir/symlink b/internal/remoteops/testdata/dir/symlink
similarity index 100%
rename from internal/agent/testdata/dir/symlink
rename to internal/remoteops/testdata/dir/symlink
diff --git a/internal/agent/testdata/exe b/internal/remoteops/testdata/exe
similarity index 100%
rename from internal/agent/testdata/exe
rename to internal/remoteops/testdata/exe
diff --git a/internal/agent/testdata/file b/internal/remoteops/testdata/file
similarity index 100%
rename from internal/agent/testdata/file
rename to internal/remoteops/testdata/file
diff --git a/internal/agent/testdata/init.log b/internal/remoteops/testdata/init.log
similarity index 100%
rename from internal/agent/testdata/init.log
rename to internal/remoteops/testdata/init.log
diff --git a/internal/agent/testdata/killme b/internal/remoteops/testdata/killme
similarity index 100%
rename from internal/agent/testdata/killme
rename to internal/remoteops/testdata/killme
diff --git a/internal/agent/testdata/main.tf b/internal/remoteops/testdata/main.tf
similarity index 100%
rename from internal/agent/testdata/main.tf
rename to internal/remoteops/testdata/main.tf
diff --git a/internal/agent/testdata/staticbin b/internal/remoteops/testdata/staticbin
similarity index 100%
rename from internal/agent/testdata/staticbin
rename to internal/remoteops/testdata/staticbin
diff --git a/internal/agent/testdata/terraform.tfstate b/internal/remoteops/testdata/terraform.tfstate
similarity index 100%
rename from internal/agent/testdata/terraform.tfstate
rename to internal/remoteops/testdata/terraform.tfstate
diff --git a/internal/agent/workdir.go b/internal/remoteops/workdir.go
similarity index 98%
rename from internal/agent/workdir.go
rename to internal/remoteops/workdir.go
index e11446963..b16cb4d1d 100644
--- a/internal/agent/workdir.go
+++ b/internal/remoteops/workdir.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"os"
diff --git a/internal/agent/worker.go b/internal/remoteops/worker.go
similarity index 97%
rename from internal/agent/worker.go
rename to internal/remoteops/worker.go
index 6b6f8f29b..b98381ec0 100644
--- a/internal/agent/worker.go
+++ b/internal/remoteops/worker.go
@@ -1,4 +1,4 @@
-package agent
+package remoteops
 
 import (
 	"context"
@@ -10,7 +10,7 @@ import (
 
 // worker sequentially executes runs.
 type worker struct {
-	*agent
+	*daemon
 }
 
 // Start starts the worker which waits for runs to execute.
@@ -42,7 +42,7 @@ func (w *worker) handle(ctx context.Context, r *run.Run) {
 	env, err := newEnvironment(
 		ctx,
 		log,
-		w.agent,
+		w.daemon,
 		r,
 	)
 	if err != nil {