A smart contract is a self-executing contract in which the conditions of the buyer-seller agreement are encoded directly into lines of code. The code, as well as the agreements it contains, are disseminated throughout a decentralized blockchain network. Transactions are trackable and irreversible, and the programming regulates their execution.
Smart contracts eliminate the requirement for a central authority, legal system, or external enforcement mechanism to carry out trustworthy transactions and agreements between distant, anonymous participants. While blockchain technology is most known for being the foundation for bitcoin, it has developed much beyond that.
Smart Contract is an account that is controlled by code.
People have Ethereum account (ie. Wallet) which is basically Public/Private key pair. The behaviour (ie sending/receiving ether) of these accounts are controlled solely by the owner of these accounts.
On the other hand, developers develop Smart Contract and deploy that Smart Contract to the Ethereum network. When a Smart Contract instance is deployed to the network that Smart Contract gets deployed under a Smart Contract account along with its code. Smart Contract code possesses different variables, functions, and rules which then controls the behaviour (ie send/receive transactions) of that Smart Contract account.