Absolute Path
In terms of directory
When we refer to a location from root like C:\Documents\MyFolder, it is absolute path.
In terms of URL
Absolute paths are called that because they refer to the very specific location, including the domain name. The absolute path to a web element is also often referred to as the URL. For example, the absolute path to this is:
http://www.stackoverflow.com/posts/21670682
Relative path
In terms of directory
When we refer to a location relative where we currently are, it is called relative path. For example, say currently you are at Documents folder in C:\Documents, to refer to MyFolder you have two choices: Absolute (C:\Documents\MyFolder) or relative (\MyFolder).
In terms of directory
Relative paths change depending upon the page the links are on. There are several rules to creating a link using the relative path:
links in the same directory as the current page have no path information listed
filename
sub-directories are listed without any preceding slashes
weekly/filename
links up one directory are listed as
../filename