Activation pairs your product key with your hardware configuration and helps verify that your copy of Windows hasn't been used on more computers than the Microsoft Software License Terms allow. Usually, you need to activate Windows only once, unless you make a significant hardware change.
Genuine Windows, however, is a recurring process that checks your product key to make sure it's not blocked or being used on hardware that's different than what you were using when you activated Windows. If the product key is found to be non-genuine it's likely that the product key is either being used on another computer or is counterfeit.
The genuine, or validation, check is performed when your computer attempts to download optional updates from Microsoft. For example, when your computer downloads updates, Windows checks to see if your product key is valid. If it is, Windows on your computer is genuine, and you're eligible to receive the latest updates from Microsoft. If it's not, your computer is running non-genuine Windows.
For more information about genuine Windows, go to the genuine Windows
website. For more information about Windows 7 activation, see Activating Windows 7: frequently asked questions.