The term 'hacker' can be used to describe enthusiasm for a game or sport, or, more recently, one's computer proficiency. More commonly, however, the term is used to describe a skilled computer user who uses this knowledge to gain an advantage over people who are less familiar with computing technology. Often times, a hacker's efforts are used to facilitate or perpetrate cyber crime.
"Hacking" into a machine.
Hacking generally involves gaining unauthorized access to a computer and altering the system in such a way as to permit continued access, along with changing the configuration, purpose, or operation of the target machine, all without the knowledge or approval of the system owners. It also refers to the development of tools to perform all the above.
It can be as simple as guessing the password of an active account, or creating an exploit to take advantage of a software vulnerability.
"Cracking" codes, licenses, etc.
'Cracking' and 'Crackers' refer to persons who breach information security measures. Often the two sets of terms, hackers and crackers, are used interchangeably. However, computer enthusiasts, benign hackers, understandably take exception to this.