Adwords is the advertising program through which people buy text ads from Google.That means Google AdWords program enables us to create advertisements which will appear on relevant Google search results pages and our network of partner sites.
Adsense is the contextual ad program running on people's pages. In this Publishers do NOT pay, Google pays money to them for each click originating from their pages.That means Google AdSense program delivers Google AdWords ads to individuals' websites. Google then pays web publishers for the ads displayed on their site based on user clicks on ads or on ad impressions, depending on the type of ad.