Generally ships are larger than boats. My father-in-law was in the navy and is very particular on this subject. All navy vessels are ships with the exception of submarines which are boats. Ships are large like cruise ships or aircraft carriers or cargo ships, while boats are like sail boats and yachts as well as row boats and bass boats.

As a very simple answer, boats go on lakes and rivers and ships go on the ocean. For a longer, complete answer, read the longer comments of the good people who shared their knowledge or check a good dictionary.