I always get confused between the terms comic-book and graphic novel. What makes a comic-book be referred to as Graphic novel? What is the difference between both of the terms?
Graphic novel is a sub-category of comic books (which are, in turn, as subset of comics). For me (and hopefully for some other people out there), graphic novels represent a more coherent, complete, and mature subset of the comic book industry (and thus my comment on a relevant meta).
This website calls comic books "periodicals", but some graphic novels were first released as periodicals as well.
However, the term is often used erratically, and almost always subjectively - there exists an obligatory group of people who only apply the term to the older and classical examples (hat tip to SW prequel haters!).
Below are some thoughts on existing examples of graphic novels, with some effort to determine what akes them graphic novels in the first place.
Wikipedia page on graphic novel attributes the popularity of the term to A Contract With God, and latter Maus (which won a Pulitzer) and The Dark Knight Returns. The books that came later, and are called graphic novels are Sin City, Watchmen, V for Vendetta, and The Sandman. One recent graphic novel I can think of is Blue Is the Warmest Color.
While I can't speak for the first two titles, one thing that is common for other graphic novels I listed is the coherent and complete storyline. Each of them is essentially a novel, except it being told in a graphic medium.
Graphic novels are usually not based on any mainstream comics; surely, there may be a couple of Batman graphic novels, but the rest usually do fly under the radar of the comicbook-ignorant community.
Apparently, a graphic novel may not be a graphic novel upon release (see Sandman), and may obtain that status over time, either by becoming famous, gathering a cult following, or vice versa.
They don't necessarily have to be long (but usually longer than an ordinary comic issue) - The Killing Joke is only 50-odd
megabytes pages long, Blue Is the Warmest Color is roughly the same. On the other hand, The Sandman took 8 years for all 75 issues to be completed.
They don't necessarily have to be serious (mature, grim, realistic, etc.) either - the Scott Pilgrim series are, in my book, a graphic novel, because it's essentially one story being told in 6 volumes.
Graphic novels that I listed revolve around one story or central plot, sometimes telling it from different perspectives. This is unlike generic comic books, which are a continuous narration, with every 20 or so issues being bound by an overarching plot called "story arc".
Graphic novels, as opposed to mainstream comics printed nowadays, are usually self-contained. There's no background reading required, and you don't have to read some other comic series to understand what's going on.
Also, graphic novels tend to introduce recurring characters, and limit introducing new characters to a minimum. A genius implementation of that principle is The Sandman, where characters from the first volume suddenly become relevant, or have their stories explained, in later volumes. Gaiman did pretty well at intertwining the fates of his characters, in unpredictable ways.
Graphic novels share some traits with ordinary novels - for instance, they often have a recurring symbol, used either as a plot device, a narration tool, or simply as a symbol. For instance, the Maiden, the Mother and the Crone in Sandman, or the characteristic red stain in Watchmen.
They (though not all) also follow the dramatic structure, which is most easily traced in Watchmen.
Note that certain Asian comics are considered graphic novels as well: Akira (won a Harvey award), Planetes, Ghost in the Shell. Though you certainly won't see many people calling them graphic novels per se, they certainly have attained the same cult status.
One could say that it's just a glorified comic - and would be in a sense correct. For instance, Neil Gaiman said that
[the person who said that Gaiman was writing graphic novels, not comic books] meant it as a compliment, I suppose. But all of a sudden I felt like someone who'd been informed that she wasn't actually a hooker; that in fact she was a lady of the evening.
From The Sandman Companion, as cited in Wikipedia
On the other hand, he uses the term "graphic novel" to describe his Mr. Punch, in his introduction to Smoke and Mirrors:
[Queen of Knives, a short story], like my graphic novel Mr Punch, is close enough to the truth that I have had, on occasion, to explain to some of my relatives that it didn't really happen. Well, not like that, anyway.
Alan Moore pins the term, with pretty much the same accusations:
Q: What do you think of the term “graphic novel” that has come into use?
Moore: It's a marketing term . . . that I never had any sympathy with. The term 'comic' does just as well for me . . . the thing that happened in the mid-’80s was that there were a couple of things out there that you could just about call a novel. You could just about call Maus a novel, you could probably just about call Watchmen a novel, in terms of density, structure, size, scale, seriousness of theme, stuff like that. The problem is that 'graphic novel' just came to mean 'expensive comic book' and so what you'd get is people like DC Comics or Marvel Comics—because 'graphic novels' were getting some attention, they'd stick six issues of whatever worthless piece of crap they happened to be publishing lately under a glossy cover and call it The She-Hulk Graphic Novel....
Source (hat tip to Valorum), emphasis mine
A graphic novel is longer and is usually a single story; comic books are shorter and are often multiple stories.
a magazine with one or more comic strips.
a novel in the form of comic strips.
So, for instance, Bone is a graphic novel, and The Essential Calvin and Hobbes is a comic book.
You can see the different in the names: A graphic novel is a long, unified, story, whereas a comic book is lots of comics.
Of course, the boundaries are a bit blurry. They are very similar, and there are cases where either would apply. But in general, a graphic novel is longer and more unified.
For some further clarification; the monthly released 'floppy' comics, published by DC, Marvel, Image etc would be called comic books always. The books made up of multiple issues of the same or complimentary comic series would also usually be called comic books. A graphic novel is usually a complete work, rather than being published in smaller parts; but this is not always the case if the term graphic novel is considered a benchmark for the best kinds of comics which go beyond the comic book label (IE Watchmen was published as individual issues and then collected and is thus considered a graphic novel in this form.) As noted by others, some creators dislike this and find graphic novel a bit pretentious. Ultimately, I think all graphic novels are also comic books but not all comic books are graphic novels.