Generally speaking, translation is the process of converting words or text from one language to another. An accurate translation is not a simple word-for-word swap but a mechanical conversion which requires clear and complete understanding of the original words or text. For a translator, translation is a challenge that it must consider the background effects of target language.
However, localization is quite different from translation. According to Wikipedia, Language localization is the second phase of a larger process of product translation and cultural adaptation (for specific countries, regions or groups) to account for differences in distinct markets, a process known as internationalization and localization. Language localization differs from translation activity, because it involves a comprehensive study of the target culture in order to correctly adapt the product to local needs. The localization process is most generally related to the cultural adaptation and translation of software, video games and websites, and less frequently to any written translation (which may also involve cultural adaptation processes). Localization can be done for regions or countries where people speak different languages, or where the same language is spoken: for instance, different dialects of Spanish, with different idioms, are spoken in Spain than are spoken in Latin America; likewise, word choices and idioms vary among countries where English is the official language (e.g., in the United States, the United Kingdom and the Philippines).
Localization is the process of adapting the original contents to the linguistic and cultural systems of the destination geo-linguistic area. It involves changing words from English to a target language. It also involves analyzing the semantics in the target language to make sure the right thing is said in the target, as well as making sure that a product “works” (functionally and linguistically) in another culture. The localization should take various aspects into consideration including technical goals, stylistic needs, and the SEO expectations and the target market.
Translation is a professional process of transposing words, ideas and concepts between languages, but localization focuses on conversion of the words and brand culture between different countries.
This means that if you have a marketing brochure and have it translated, it will be returned to you in the same design (or almost the same, allowing for differences in character length etc.). If you had the same brochure localized, depending on language/culture, it may come back to you as a completely redesigned brochure; new colours, images, layout and content. This is because localization is the process of taking your concept/idea/brand and placing it within an appropriate cultural context. Localization can be taken to various degrees; working within an existing design or completely rebuilding the marketing collateral from the ground up for the target market.