A shell is a command-line interpreter that provides a user interface for the Unix/Linux operating system. The shell interprets the commands you enter in the terminal and tells the operating system to execute them.
Analogy
Think of the terminal as a movie theater and the shell as the movie being played. The theater (terminal) provides the environment and tools (screen, seats, speakers) to experience the movie, while the movie (shell) is the actual content or the interpreter that you interact with.