The term compensation is used for the modification or compensation of
the performance characteristics of a system so that the required
characteristics are obtained. Compensators are components which are
added to a control system in order to modify closed-loop performance.
They can be added anywhere in a control system. Controllers are
components which basically have an input of the error signal and an
output of a signal to modify the system output and give the required
characteristics. They are thus used at a specific point in a control circuit.
From the design point of view there is no real difference between
compensators and controllers, the two terms reflecting differences in
hardware. Traditionally a controller is a stand-alone component offering
a range of control modes such as proportional gain and integral and
derivative action and normally includes a summing element.