Here’s an article from the W3C: Localization vs. Internationalization
The short answer from them seems to be:
Localization refers to the adaptation
of a product, application or document
content to meet the language, cultural
and other requirements of a specific
target market (a “locale”).Internationalization is the design and
development of a product, application
or document content that enables easy
localization for target audiences that
vary in culture, region, or language.
So, it seems that internationalization is making the product able to be localized to a specific market. According to the W3C, globalization is another term for internationalization.
Personally, I use them mostly interchangeably but check out the article for more specificity of what each entails.