Ambient occlusion is a shading method used in 3D computer graphics which helps add realism to local reflection models by taking into account attenuation of light due to occlusion. Ambient occlusion attempts to approximate the way light radiates in real life, especially off what are normally considered non-reflective surfaces.
Global illumination is a general name for a group of algorithms used in 3D computer graphics that are meant to add more realistic lighting to 3D scenes. Such algorithms take into account not only the light which comes directly from a light source (direct illumination), but also subsequent cases in which light rays from the same source are reflected by other surfaces in the scene, whether reflective or not (indirect illumination).
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