The quote is the title of an essay is from 1979 and appears in several places, including This Bridge Called My Back (Anzaldua & Moraga, eds., 1981.) The essay is called: "The Master's Tools Will Never Dismantle The Master's House."
I, too, find this quote endlessly annoying. One useful thing about a class analysis is that it allows us to see that in different hands and used for different purposes, the outcomes can be quite different, in short, the master's tools aren't. We don't have to smash the looms, as it turns out. But if I recall correctly--it's been a long time and I'm away from my books, too--Lorde is talking more about the structure of academia and also how the terms of a debate can be set (for example we're constantly supposed to tell men precisely how to shape up) but that we shouldn't fall into this kind of trap. I remember disagreeing with her, but to be fair her quote is put to many bizarre and even more indefensible uses. Here's more context:
"Those of us who stand outside the circle of this society's definition of acceptable women; those of us who have been forged in the crucibles of difference-those of us who are poor, who are lesbians, who are Black, who are older-know that survival is not an academic skill. It is learning how to stand alone, unpopular and sometimes reviled, and how to make common cause with those others identified as outside the structures in order to define and seek a world in which we can all flourish. It is learning how to take our differences and make them strengths. For the master's tools will never dismantle the master's house. They may allow us temporarily to beat him at his own game, but they will never enable us to bring about genuine change. And this fact is only threatening to those women who still define the master's house as their only source of support." (Lorde, 1979.)
Jenny Brown