As Webster's definition suggests,
universities differ in several ways from colleges; however, his
writeup doesn't really capture the modern use of the term.
Many people think of a college as "an institution that grants only
bachelors' degrees," but the technical definition is
"an institution that bestows degrees in one particular field of study."
So a undergraduate liberal-arts institution like Swarthmore is a
college--but so is a medical school or a law school or a divinity
school. (The latter are usually called "schools," "institutes," or
occasionally "faculties," so people will often look at you oddly if you
say you're in "graduate college.") Along the same lines, people sometimes
think that any institution that grants graduate degrees is a university,
but that isn't true either. Thus, some colleges (such as Middlebury) offer
MA degrees as well as BAs, and others (such as the Medical College of
Wisconsin) offer no undergraduate degrees at all.
In the US, a university is almost always a
collection of two or more colleges, one of which is usually a
graduate institution. Thus a university may actually contain several
colleges.
Exceptions include Dartmouth College, which has medical and business
schools, and Rockefeller University, which only offers PhD
degrees.