A condensation reaction is a polymerisation reaction where two or more monomer units join together and a small molecule, often water, is eliminated. An example is the polymerisation of glucose, to make cellulose and water.
A dehydration reaction is a reaction where water is removed from a compound. For example, ethanol is dehydrated by heating it with concentrated sulphuric acid which acts as a catalyst, forming ethylene and water. The reverse reaction is called hydration.