Modularization is ‌breaking down a program's functionality into SEPARATE, independent modules, each of which includes just the information needed to carry out one part of the intended capability. In simple terms, it is the practice of dividing the program into smaller modules so that we can deal with them separately. We can simply add independent and smaller modules to a program USING modularization without being hampered by the complexity of the program's other functionalities. Modularization is BASED on the notion of designing applications that are easier to develop and maintain, self-contained components. In monolithic design, on the other hand, there's always the risk of a simple change knocking the entire application down. The final STEP would be to COMBINE these independent modules.

In the above diagram, both the applications have been divided into smaller modules. These modules can then be dealt with separately.