An error is an irrecoverable condition occurring at runtime. Such as OutOfMemory error. These JVM errors and you can not repair them at runtime. While exceptions are conditions that occur because of bad input etc. e.g. FileNotFoundException will be thrown if the specified file does not exist. Or a NullPointerException will take place if you try using a null reference. In most of the cases it is possible to recover from an exception (probably by giving user a feedback for entering proper values etc.).
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