Just think about it in terms of McDonald's (bear with me).
McDonald's is internationalized because it can be localized. You can't easily localize, say, an American flag shop unless you expanded your company to make all the countries' flags.
McDonald's is localized because when you go to the McDonald's in Japan, there is very different food there than there is in, say, the USA. It's also all written in Japanese. This means they have adjusted their product to the language and culture of Japan.
To me, localization is when you make specific products for different cultures. For example: www.google.com and www.google.co.nz. They are both Google. One is for the US (or generic) and one is for New Zealand. They are both in English... but they are localized to the culture of their respective audience.
Does that make sense?
