The Application is the single largest unit of work in your Elixir application. A Project is what organizes your Application (or Applications) into a single functioning piece of work, but ultimately the Application is the largest unit that ends up getting built, assembled, and run for the BEAM VM.

You can think of the Application as the big piece that gets compiled and executed by the BEAM VM and the Project as everything that glues that Application together! Applications can also work in conjunction with other Applications, so they can also be isolated nicely by their functionality. This is a pretty common model for libraries that get pulled into Phoenix applications (Poison and HTTPoison being immediate examples of that)!