Terminology

Powershell has its own terminologies besides other shells like bash. It's a shell integrated with .NET, it's not a independent platform.

• cmdlet: precompiled .NET assemblies work for PowerShell, implemented using other languages typically in C#.
• function: a command implemented using powershell language itself.
• application: external executable.

Session

Session is an environment state created on Powershell instance starts. A session is not a scope, all environment of sessions are isolated. The scope of the session is the top scope.

Runspace

Runspace is a customized instance of Powershell by powershell code. In general, you can't control how powershell loads Providers and builtin member and so on. So Powershell exposes such api to create a customized object to represent the truncated or enhanced instance of the Powershell environment. By this approach, you can expose minimal privileges and custom utilities to users for certain tasks.

Each Runspace creates isolated session state just like a normal powershell instance.

A normal powershell can be referred as a Runspace too.