Excavation moves earth: cutting high ground, digging trenches and footings, hauling material in or out. Grading shapes it: working the surface to designed elevations and slopes so structures sit right and water goes where it should. Most projects need both, sequenced as cut and fill.
More detail
The two words describe two jobs that share equipment. Excavation is volume work, measured in cubic yards: cutting a sloped lot down to a level bench, digging footings, trenching utilities, carving a pond or a basement (rare here), and importing or exporting material when the site cannot balance. Grading is precision work, measured in tenths of a foot: spreading and shaping material to the design surface, crowning a pad so it sheds, cutting a swale to carry runoff, feathering a drive so a trailer does not drag. On a typical corridor project the two interleave as cut and fill: high ground is excavated, that material becomes fill in the low areas (placed in compacted lifts, not just pushed), and the whole site is then graded to finished contours. When a plan calls the ground close to balanced, cut and fill on-site is the economical path; when it does not, the scope prices import or export honestly. The part of grading that earns its keep for decades is the drainage: finish grading is what sends roof and surface water away from a foundation (the working rule is about 6 inches of fall in the first 10 feet), keeps a gravel or concrete drive out of the water's path, and turns a lot that ponds into one that drains. A scope that quotes dirt work without a grading plan for the water is half a scope.