How can external sharing of documents in Google Drive be restricted?

Restricting external sharing of documents in Google Drive is effectively accomplished through adjusting the sharing settings. By modifying these settings, a user can control who has access to the documents and to what extent that access is granted. For example, the settings allow users to choose if a document can be shared with anyone with the link, with specific people, or if it can be restricted to individuals within a particular organization.

Adjusting these settings also includes options to prevent editors from changing access permissions or sharing files with others, thus ensuring tighter control over who can view or edit the information. These features give organizations the ability to maintain data privacy and security in a collaborative environment.

The other methods listed do not offer direct mechanisms for restricting external sharing. Sharing links with the public allows open access, while disabling version history and using encrypted files do not inherently control document sharing settings in Google Drive.