Best Answer: One definition that is often used is that you can fit a boat inside a ship but you cannot fit a ship inside a boat. A ship is a commercial vessel such as a passenger ship, a freighter or a tanker. A boat is smaller - could be a fishing boat, a dinghy, a sailboat, a row boat, etc., and could actually be fairly large. A yacht is a personally owned pleasure boat, either a sail boat or a power boat, but is not a ship.