Powdered collagen is dry hydrolyzed collagen that you stir into a drink or food. Liquid collagen is the same kind of peptide already dissolved in water or a flavored base. The real differences are collagen per serving, added ingredients, price per gram, and how easy each form is to take every day.
Hydrolyzed means the large collagen protein has been cut into short pieces called peptides. Think of a long rope that cannot fit through a small gap.