Resolution is the smallest reading difference that is possible in a given measuring instrument. For example, take a scale, also known as ruler, one can see that 1 mm (or 0.1 cm) is the resolution of the measuring scale. For example, I measure the length and width of a book, I can measure it using a scale and say Length of the book is 30.0 cm x 18.4 cm. The resolution of the scale is 0.1 cm as it has 10 equal divisions in 1 cm.
Sensitivity on the other hand is the smallest amount of change in the measured parameter that causes a reading change equivalent to resolution of the equipment. Sensitivity is relevant when measurements are made in units other than the quantity being measured; For example a load cell which converts load to mV, has a sensitivity of mV/V Full Scale i.e. for a 1 Kg load cell with 5V excitation and the output is 3mV, then sensitivity is 3mV for 1V excitation and for 5V excitation it will be 15 mV.
The weighing scale will have a resolution of 1milligram but the component inside i.e., load cell will have a sensitivity of 3mV/V FS.
A sensor has sensitivity while the instrument which displays the final parameter has resolution. Scale for instance has resolution while it does not have sensitivity. Sensitivity is usually attached to sensors or devices which transform from one form to another.
For example, Thermocouple (which converts temperature to millivolts) has sensitivity while a thermometer has resolution.
Finally, Resolution is the smallest increment that can be read from the instrument and sensitivity is the smallest amount applied that can change the reading resolution by its least significant digit.
