A cryptocurrency is self-sufficient, not relying on any other cryptocurrency to function (not including merged mining), and requiring its own software. A token works like a cryptocurrency at a high level, but relies on some other cryptocurrency's infrastructure in order to function, and often (but not necessarily always) lacks its own software.

Example 1
You create an Ethereum asset. This asset is entirely reliant on Ethereum's block chain to function. It is a token.

Example 2
You pick out 1 BTC and split it into 100 million satoshi. Each satoshi represents some part of a real-world thing, and gets a special ticker symbol. This is a token because it is completely reliant on Bitcoin's block chain to function.

Example 3
You create an Ethereum contract which allows anyone perpetually to trade 0.1 ETH for 1 YOURTHING and vice-versa. This is ambiguous, and may require moderator discretion. It may be considered a token, or it may be considered merely a flavor of ETH, belonging in Ethereum threads, etc.