What is the difference between colonization and imperialism?

There is no clear cut difference between colonialism and imperialism. Both these terms refer to the practice of one country controlling or seeking to control another country or territory, and frequently these terms are used interchangeably. However, the term colonialism is more frequently associated with one the ruled country is situated away from the ruling country. and the ruling country exploits the ruled country economically and in other ways. Imperialism may also involve such exploitation, but not necessarily. There have been many instances of king of ancient times establishing huge empires, over which they ruled without any discrimination between the original smaller country, and the areas added later.

I do not think that settling down in the ruled countries is a feature specific to colonization. When one country exercises power over another, some people from the ruling country may move to ruled country without  an explicit policy of settling people of ruling countries abroad. For example Britain never followed the policy of settling its people in India. But many people form there came to India to carry out business activities. In most of these cases such people still regarded England as their home and returned to it after retirement.