Yes, you can transfer an iMovie project to an external drive and edit it there with your iMovie app that is located on your internal drive. However, an iMovie project can only exist in an iMovie library. So, in order to copy the project to an external drive you would need to copy it into an iMovie library that is located on the external drive. (You can create one there for this specific purpose.) Another way would be to copy your entire iMovie library that contains the project, from your internal drive to your external drive. A third way would be to create a new iMovie library on your internal drive, copy the project into it, and then transfer or copy the new library to the internal drive.
When you double click on the library on the external drive, iMovie will open in it and you can edit the project. Thereafter, when you open iMovie it will point to the library on the external drive and open in it, as long as the drive is plugged in. After you close iMovie you can double click on any library icon and iMovie will open in that library. Or from within iMovie you can do a File/Open Library/New to open in a new library other than the one in which it initially opened.
-- Rich