Revision includes evaluating the work as a whole. If it's fiction, make sure you have a good plot, well-rounded characters, a consistent point of view and a strong theme. If it's nonfiction, make sure the work is unified, focused and interesting.
A big part of revision is rewriting, which comes after honest evaluation. If your manuscript has a major problem, brainstorm solutions, delete the sections that aren't working and rewrite them. You may even choose to start from scratch.
Editing involves focusing on the language. Once you have a manuscript free of major problems, it's time to look for redundant phrases, passive verbs, cliches and other language problems.
Waiting is an optional but wise component of revising. It's helpful to put your manuscript in a drawer for a few weeks before doing the final proofread and preparing to submit it for publication.
Proofreading means looking for errors like misspellings, typos, grammar mistakes and incorrect punctuation. It is usually the last stage of revision.