Compositing and sequencing are two different processes for making a video. Compositing is the process of combining video clips that were shot separately into one single video. Sequencing is the process of arranging video clips in a certain order to create a story.
Sequences are often used in documentaries, where the content is made up of separate shots, but with a continuous narrative. They can be used to show certain events happening over time - for example, someone walking from point A to point B over the course of several hours.