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Questions & Answers about O que é aquilo?
Why do we use O que for "what" instead of just Que?
I've seen words like isso for "that". Why use aquilo here?
Aquilo specifically means "that thing over there" (far from both you and the person you are talking to). It is also a "neuter" word, which is perfect here because you are asking what the object is, so you don't know its gender yet! If the object was near the person listening to you, you would use isso instead.
Does the word order change because this is a question?