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Sanding is the process of smoothing or polishing a surface with sandpaper or a mechanical sander, it is one polishing process too.
Polishing is the process of creating a smooth and shiny surface by rubbing it or using a chemical action, the process of polishing with abrasives starts with coarse ones and graduates to fine ones.
Polishing and sanding are not only used to create a smooth, defect-free surface as the preparation procedure before painting or electroplating, but also to create the final finish.
This is a simple definition of Sanding and Polishing on machining industry, learn more for the definition of two words in different fields in Wikipedia.