There is very little difference between the two words. If you are describing how objects and concepts are connected to each other, the words can both be used in the same way. "Relationship" is the more commonly used word for descriptions. In terms of family, "relation" refers to a person who is related to you e.g. "I have a lot of relations." "Relationship" describes the connection between two people, e.g. "We have a strong relationship".

when there becomes a SHIP in relation then it becomes Relationship :p