Drawing my conclusion from posts of awesome SO evangelists above, I conclude that both are software that resides on actual metal servers(physical servers). Both work hand in hand to get service to the end-user. Then, depending on the setup, we can choose what to call it, which means how to describe it depends on the actual setup in use. If they both reside on the same bare metal(physical server), we call it web and application server...simple! If on separate machines, obviously, we have two distinct bare metals(physical servers) at our hands. Then we can label these servers according to their function: one web server and the other application server.