A country's main diplomatic mission abroad, based in the host nation's capital, and the top authority for its citizens' passports and emergencies in that country.
An embassy is your government's headquarters inside another country, always in the capital city. It handles the government-to-government work, and for a traveler it is the senior office for the things only your own state can do: emergency passports, help after an arrest, evacuation coordination. Every country you can visit has at most one embassy from your home country, and if you are far from the capital, the embassy usually routes you to a consulate closer to you.
An American in Colombia deals with the US Embassy in Bogota. Lose your passport in Medellin and the embassy is the authority that issues the replacement, even if a consular agency closer by handles the paperwork.
The difference is the whole point, so here is each one in a line.
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