Patch The term patch file is used for two different file types. The term patch file is sometimes used to refer to archive files that allow you to upgrade from one Joomla! version to another (for example, from version 1.0.0 to version 1.0.7). These upgrade files are also referred to as upgrade packages. The other meaning for a patch file is a file created by source code version control software -- for example, Subversion or SVN, which is used for the Joomla! source code. This type of patch file contains instructions for changing the contents of one or more source code files. The SVN software reads the patch file and then can automatically change the source code of the files being patched. Patch files are used by the Bug Squad to test proposed bug fixes. They can also be used to contribute proposed new features to the version under development. For more information about the structure of SVN patch files, read Learn more about patch files.
Plugin A plugin is a kind of Joomla! extension. Plugins provide functions which are associated with trigger events. Joomla provides a set of core plugin events, but any extension can fire (custom) events. When a particular event occurs, all plugin functions of the type associated with the event are executed in sequence. This is a powerful way of extending the functionality of the Joomla! Platform. It also offers extension developers a way to allow other extensions to respond to their actions, making extensions extensible. The Joomla! plugin architecture follows the Observer design pattern. The JPlugin class provides the means to register custom plugin code with core or custom events. The JDispatcher class (JEventDispatcher in Joomla 3.x) is an event handler which calls all plugins registered for a particular event, when that event is triggered. Reference: http://docs.joomla.org/Glossary