A tty is a terminal (it stands for teletype - the original terminals used a line printer for output and a keyboard for input!). A terminal is a basically just a user interface device that uses text for input and output.
A pty is a pseudo-terminal - it's a software implementation that appears to the attached program like a terminal, but instead of communicating directly with a "real" terminal, it transfers the input and output to another program.
For example, when you ssh in to a machine and run ls
, the ls
command is sending its output to a pseudo-terminal, the other side of which is attached to the SSH daemon.