Lets have an example scenario:
Client opens a web site and finds the sum of two numbers which he enters from the textboxes.Then clicks on the ADD button.Two parameters a
Web service is for application consumption , invoked through web application To communicate with webservice data should be sent as SOAP message or as REST i.e XML over HTTP
Most of the times web service is not part of application because to facilitate the use by other web applications and it is not for direct consumption to end users
Web application is for human consumption invoked directly by GUI which may or may not use web service for giving response