The distinction may be challenging for the new writer to understand (and even published writers have to keep a wary eye out for it). But if you want writing that gets inside the reader and keeps them turning pages long after bedtime, it's one you'd better learn. And what is the difference?
Consider the following sentence: He grew furious.
I gave you a fact. Something happened, and a character grew furious. I told. Which is fine, and sometimes, it's necessary. But now, consider this passage: John glared at his cowering brother, teeth clenched, his expression a thunderhead of rage. Without moving a muscle, he seemed at once to become larger and more compact, his muscular frame poised on the verge of unleashing violence.
Okay, not great, maybe. But I hope this illustrates the difference between telling someone how a character feels and showing, through the character's thoughts and actions. One is factual and dull. The other is visceral and evocative, forming a connection between the reader and the character, even if the character isn't a likable one. It gets the reader in the moment, allowing him or her not only to visualize, but to feel the action as it takes place. I didn't just tell you he was furious, I made you get right in there and see it!
Now try this one: He was an ugly man.
Versus: The girl behind the counter glanced up at him and recoiled slightly, her smile nearly collapsing into the grimace of distaste he could see trying to replace it; it was a look he'd gotten nearly every day his entire life, and it no longer bothered him. Well, not so much. Not most days.
Again, the first example is mere exposition. It states a detail about a character. But the second example paints a much more vivid picture by showing the reaction of others to the character, as well as giving some insight into the character's mindset regarding his own ugliness. It is a thing he is aware of, and to a certain degree, accepts.
Sometimes, the difference between telling and showing is as simple as choosing a stronger verb or verb phrase: He sat, impatiently vs. He threw himself into the chair and waited, one knee bouncing up and down like a jackhammer. Or She walked in the door, vs She glided into the room, She stormed in, She slunk in. (See how changing the verb gives you a different image of her walking in? Hence, the power of showing!)
Anyway, you get the picture.
Again, exposition can be a fine and useful, even necessary thing. But when you combine images, strong verbs, good dialogue, and specific visual details of characters acting, reacting, or interacting, you help the reader move past the intellect to that place where dreams are real and anything can happen. It's called the willing suspension of disbelief, and it is your job, as the writer, to lay straight the path there. So, before you consider your masterpiece well and truly done, do yourself a favor and go back through it one more time. Look for some areas where you can show us the action rather than telling. I promise you, any potential publisher will be sensitive to it. Because they know that if they can't "see" it, neither will the readers.