An emulator is a piece of software that translates compiled code from an original architecture to the platform where it is running, such as the great MAME. In the mobile development world, a device emulator is a desktop application that emulates mobile device hardware and operating systems, allowing us to test and debug our applications and see how they are working. There are also operating system emulators that don’t represent any real device hardware but rather the operating system as a whole. These exist for Windows Mobile and Android.
On other hand, A simulator is a less complex application that simulates some of the behavior of a device, but does not emulate hardware and does not work over the real operating system. These tools are simpler and less useful than emulators. A simulator may be created by the device manufacturer or by some other company offering a simulation environment for developers.
The Android SDK includes a mobile device emulator — a virtual mobile device that runs on your computer. The emulator lets you develop and test Android applications without using a physical device.