Decriminalization is the process by which something that is illegal becomes less illegal. Legalization is the process by which something that is illegal becomes legal.
Example. Several states in the US have legalized marijuana for medical use and in some states for recreational use. Even though it is highly regulated, and infraction of those regulations can carry stiff penalties, it is still legal, much like tobacco or cigarettes, in those states.
However, on a federal (US) level, sale or production of marijuana is considered a felony, and can lead to jail time, up to life in prison for sale of 1000 kg. If the federal government were to tone down the penalties, or decide not to prosecute some minor infractions, that would be decriminalization, that is, making it “less illegal”.