Google Adwords is an advertising platform owned by Google. Advertisers can use this platform to position their ads in the Google Search Result Pages, Google Products (YouTube, Gmail etc) and to thousands of other websites that participate in the AdWords program as publishers.
Adwords is for Google sites and websites that use Google Adsense while SEO principles are applicable for all search engines. With Adwords is easier to calculate the ROI while with SEO is more difficult because there are a lot more factors that play a role and not just ad spending and revenue.
Adwords ads appear on the top and bottom of Google Search Results and under certain conditions you can get one of those ad positions, but with SEO you have to work much harder to get one of the top positions in the organic search results.