Types of Fonts in Windows

Raster / Vector Fonts

Older versions of Windows used raster fonts only (file extension .FON). Glyphs are bitmap images. These fonts are not scalable: a font is designed for a specific size and a specific resolution. Some of these older fonts are still present in Windows, mainly for screen display in console mode (MS Sans Serif, VGA8514a.fon, etc.).
Vector fonts, having the same file extension (.FON) are line fonts used for devices like plotters. Vector fonts are scalable, but they render poorly on screen (Modern.fon is an example).
These fonts cannot be installed dynamically. The system must be restarted in order to install a font.

TrueType Fonts

Since its version 3, Windows mostly uses TrueType fonts (.TTF). TrueType is a format originally designed by Apple Computer. The font outlines are drawn using mathematical algorithms. The benefit is a consistent layout, whichever size or resolution is wanted. This format also has the advantage of being independent of the platform: The same font file can be used in Windows, Linux or MacOs.

TrueType also defines font collections. A collection is a set of fonts that share some characteristics and are more efficiently presented in a single file (.TTC). Note that all fonts in a collection are managed together (installing one means installing the whole set, the same is true for uninstall)

PostScript (Type 1) Fonts

In parallel, Adobe proposed, for professional uses proprietary rendering technologies based on PostScript (Type 1 is the most common). They needed a specific manager (Adobe Type Manager) to render them. The driver is included in Windows since version 2000. A Type 1 font for Windows uses 2 files : a file for metrics (.PFM - Windows Specific) and a file for outlines (.PFB).
Type 1 are now deprecated. They are being replaced by OpenType fonts.

OpenType Fonts

OpenType (TrueType Open Version 2) is a common font format specification from Microsoft and Adobe. It is an evolution of TrueType allowing, between other enhancements, to mix TrueType or Type 1 (PostScript) font format in a common wrapper. OpenType is included in Windows since Version 2000.
The (.OTF) file extension is used for OpenType fonts with PostScript outlines (CFF Adobe).

OT1 Font Manager can manage TrueType, OpenType, TrueType Collection and Type 1 (except Multiple Master).
Anyway, Type 1, both single & multiple master, are now obsolete formats.