"Psychotherapy" and "counseling" are terms that are often used interchangeably. Although they are very similar, there are some subtle differences as well.
Technically speaking, "counselor" means "advisor." It involves two people working together to solve a problem. It is a term that is used in conjunction with many types of advice giving. For example, financial planning and spiritual guidance are both types of counseling. Just about anyone at all may claim to be a counselor if they are in the role of giving advice. The term counseling may also properly be used to refer to what occurs in a relationship with a psychotherapist.
In the context of mental health, "counseling" is generally used to denote a relatively brief treatment that is focused most upon behavior. It often targets a particular symptom or problematic situation and offers suggestions and advice for dealing with it.
"Psychotherapy" on the other hand is generally a longer term treatment which focuses more on gaining insight into chronic physical and emotional problems. It's focus is on the patient's thought processes and way of being in the world rather than specific problems.
In actual practice there may be quite a bit of overlap between the two. A therapist may provide counseling with specific situations and a counselor may function in a psychotherapeutic manner. Generally speaking, however, psychotherapy requires more skill than simple counseling. It is conducted by professionals trained to practice psychotherapy such as a psychiatrist, a trained counselor, social worker or psychologist. While a psychotherapist is qualified to provide counseling, a counselor may or may not possess the necessary training and skills to provide psychotherapy.