The web is made up of millions of pages of information stored on many interlinked computers around the world. Search engines and web directories are like the library catalogues.
Some search engines combine the two.
The computer-built search engines continually trawl the net, finding sites and building up a database of sites with the keywords that are hidden within the web pages. The human-edited directories are more like the Yellow Pages. The directory editors decide which sites to include and list them under appropriate category headings. Each category has an editor who decides which appropriate web sites to include. Each category has subcategories, and so on.