This is actually what is known as "orange zest". The thin colored portion of the orange peel contains a lot of essential oils that are full of a great orange smell and concentrated orange flavor. (The white part of the orange peel should not be used, it has a bitter and unpalatable flavor.) Orange zest is used in savory dishes to give them a little punch of citrus flavor, its in orange marmalade, and its used in many desserts to give them a great aroma and flavor.
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