Typically a design is created before full production so that a person or company can get an idea of exactly what this thing is going to look like before going live. Web design is the process of creating the look, the feel, what are called screen designs, prior to, or a vital part of, the real production of the website. This process is usually birthed of conversations with the client and comes out in the small flicks and mouse movements of the designer assigned or hire to produce the website.
Web development on the other hand, when looked at from a company employee's perspective is usually the person or persons involved in building a site. This may start with the person responsible for cutting up the site (turning it from mere graphic files into something that can be displayed on used on a browser), through someone who takes care of the javascript elements (often the interactive elements), and finally it may also be considered a programmer or team of programmers building the code in the back that will truly power the site or the site's functionality.
In a way, the entire process of web design and web development can be thought of as a house. The initial stage is much like the mockups developers give you when you walk into a model or a sales office. You are presented with a beautiful brochure of exactly what your house will look like. This is a screen design. The foundation, walls, wood and pilings these are akin to HTML they are the groundwork by which your website is displayed to the world. The CSS is the paint on the walls, the pictures, the rugs anything that gives your home style. Javascript is your doors, your windows, the way in which you interact with your home. And finally, your appliances, the tools by which you and those that enter your home get things done (washer, dryer, disposal) this is much like custom programming.
So to conclude, web design from either perspective is smaller in scale and nature. But, a very vital and essential part to building anything on the web.
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