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Simulator or Emulator? What is the difference?

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While I understand what simulation and emulation mean in general, I almost always get confused about them. Assume that I create a piece of software that mimics existing hardware/software, what should I call it? A simulator or an emulator?

Could anyone explain the difference in terms of programming?
Bonus: What is the difference in English between these two terms? (Sorry, I am not a native speaker :)

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