Android SDK
Android SDK is the main development kit required to build any application for Android. Without going into details, it can be said that the SDK is the skeleton for any Android development. This SDK itself comes with dozens of support tools. It contains platform details, APIs, and libraries along with ADT and AVD. So having Android SDK integrated in the system provides the developer with all the necessary tools. It is a very good practice to always update the SDK with the latest platforms and other tools.
Upgrading can be done through the Android SDK manager. However, platform selection is manual, and it is recommended to have only the necessary platforms as per requirements. Another best practice is to have the latest released platform along with the minimum targeted version of Android (image source: http://photos4.meetupstatic.com/photos/event/1/1/0/f/highres_441724367.jpeg):