The primary distinction between hardware and software is that hardware refers to the physical components of a computer or device, while software comprises the programs and applications that run on that hardware. Hardware includes items like processors, memory, and storage devices, which are tangible and can be physically interacted with. In contrast, software is intangible and consists of code and instructions that tell the hardware how to operate. Both are essential for a fully functional computing system, as hardware requires software to perform tasks, and software relies on hardware to provide the necessary resources.