Feudalism is refers to an overall structure of society such as that which existed in Western Europe during the Middle Ages, while manorialism refers to the type of economic system that controlled the means of production during that era. Manorialism is the economic component of the larger societal system generally called feudalism. The terms feudalism and manorialism have been exchanged for each other at times, such as in the case of Adam Smith, who in his influential work, "The Wealth of Nations," uses the term feudalism in more of an economic sense than as a reference to the societal and political structure that was prevalent during the Middle Ages.
Manorialism was an economic system that controlled the means of production, primarily agricultural, prior to the development of a market system based on contractual labor and an exchange of money for commodities. In the manorial system, power and land holdings were granted to the various lords of the manor in exchange for their allegiance to their overlord or king. The lord of the manor extracted from the peasants living on their lands the obligatory turnover of agricultural and handmade goods that served as a form of "rent." The overall economic system is one based on an exchange of commodities and services for land and, in the case of the peasants, continued tenancy.
Feudalism is the societal structure characterized by a network of personal bonds of allegiance and obligations along a decentralized and often tightly localized hierarchical structure. The feudal system placed a great deal of political, military and jurisdictional power in the hands of local lords and overlords and functioned without the normal restraints of a centralized government.