Relocation is the physical move: people leave their homes and settle somewhere else. Resettlement is the whole process, covering compensation, relocation, replacement of services and livelihood restoration, until living standards are restored.
The handbook separates two kinds of impact. Physical displacement means losing shelter and having to move. Economic displacement means losing land, income or access to resources without moving. A farmer who loses fields but keeps the house is still covered, so a project can have resettlement obligations even when nobody relocates.