Liturgy is the public prayer and worship of the Church. The Greek origin of the word means "public work" or "service done on behalf of the people." In the Bible, liturgy is used in reference to the priests' duties in the Temple. In the Church today, liturgy is the official public worship of the Church and includes Mass, Sacraments, and the Liturgy of the Hours.
The Catechism of the Catholic Church teaches that, "it is the whole community, the Body of Christ united with its Head, that celebrates. 'Liturgical services are not private functions but are celebrations of the Church which is 'the sacrament of unity,' namely, the holy people united and organized under the authority of the bishops. Therefore, liturgical services pertain to the whole Body of the Church. They manifest it, and have effects upon it.'" (1140)
Sacraments are outward signs, instituted by Jesus, to give us grace. There are seven sacraments: Baptism, Confirmation, Eucharist, Penance, Anointing of the Sick, Holy Orders, and Matrimony. The outward elements of sacraments, such as the water and words used in Baptism, are perceptible to our senses and help us understand the reality of the inner, invisible grace we are receiving. Grace is an unmeritied gift of God and the Sacraments were established by Christ and entrusted to the Church to give us access to this share in God's own life.
To learn more about Liturgy and Sacraments, please see the following resources:
Catholic Sacraments, Vehicles of Grace
The Seven Sacraments, Catechism of the Catholic Church
Celebrating the Church's Liturgy, Catechism of the Catholic Church
Sacraments, Channels of Divine Grace, Father Hardon
These Are The Sacraments, Archbishop Fulton J. Sheen