The IPSW is the entire operating system and firmware for the phone. It's basically wiping the phone clean with a fresh install of the OS and the firmware. If you are using the IPSW to update, it's the same thing ... the entire OS. Whereas OTA is Over the Air and is just sort of a patch. It's not the full OS, which makes it considerably smaller in file size. I find I have less issues with bugs when I use IPSWs over OTA. It's also much faster to update than OTA. I get all my IPSWs from here:
Download current and previous versions of Apple's iOS, iPadOS, macOS, watchOS, tvOS, audioOS and visionOS firmware and receive notifications when new firmwares are released.
ipsw.me
Their links come directly from Apple's servers.