An entitlement is a "voucher" for a license(s) that you are entitled to install on any of your machines. An entitlement may be for a new license, or an extension/upgrade/increment to an existing installed license.

Entitlements are transformed into licenses when you log into the licensing system and "redeem" them. When you redeem an entitlement, you bind it to a specific license server machine and you turn it into a license tied to that computer. Also, a license expiry date (if any) is calculated based on the redemption date rather than on the purchase date.

It's something like a movie ticket. The ticket isn't the movie itself (the thing you paid for), but it allows you to go in and watch the movie. In the same way, the entitlement is not a license (you can't run Houdini with it), but it allows you to come and get a license from Side Effects Software.