A Dictation application uses Speech Recognition to translate your speech into written text on your computer.
A Dictation application lets you speak into a microphone attached to your computer, and have the text print out on your computer screen. It can recognize a larger number and variety of words. It can recognize arbitrary phrases with words in any order.
This is different from a Command and Control application which also uses speech recognition but is limited to controlling your computer and software applications by speaking short commands. Here, the vocabulary that the speech recognition engine can recognize is much smaller than in dictation, and is limited to a small set of words and predefined phrases.
Commercial dictation systems usually include a command and control system.