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Justification and Sanctification: What is the Difference?

Understanding the difference between justification and sanctification can be as important as understanding the difference between salvation and damnation. Rightly dividing between the two is of crucial importance. When you understand what they are, you can then draw a line in the sand and say, "This is what saves. This is not what saves."
Justification is the work of God where the righteousness of Jesus is reckoned to the sinner so the sinner is declared by God as being righteous under the Law (Rom. 4:3; 5:1,9; Gal. 2:16; 3:11). This righteousness is not earned or retained by any effort of the saved. Justification is an instantaneous occurrence with the result being eternal life. It is based completely and solely upon Jesus' sacrifice on the cross (1 Pet. 2:24) and is received by faith alone (Eph. 2:8-9). No works are necessary whatsoever to obtain justification. Otherwise, it is not a gift (Rom. 6:23). Therefore, we are justified by faith (Romans 5:1).
Sanctification, on the other hand, involves the work of the person. But it is still God working in the believer to produce more of a godly character and life in the person who has already been justified (Phil. 2:13). Sanctification is not instantaneous because it is not the work of God alone. The justified person is actively involved in submitting to God's will, resisting sin, seeking holiness, and working to be more godly (Gal. 5:22-23). Significantly, sanctification has no bearing on justification. That is, even if we don't live a perfect life, we are still justified.
Where justification is a legal declaration that is instantaneous, sanctification is a process. Where justification comes from outside of us, from God, sanctification comes from God within us by the work of the Holy Spirit in accordance with the Bible. In other words, we contribute to sanctification through our efforts. In contrast, we do not contribute to our justification through our efforts.

Does this mean that those justified by grace can sin as much as they want?

Romans 6:1-2 says, "What shall we say then? Shall we continue in sin, that grace may abound? God forbid. How shall we, that are dead to sin, live any longer in it?"
1 Thess. 4:7 says, "God has called us not for the purpose of impurity, but in sanctification."
The Scriptures teach us that we are to live holy lives and avoid sin (Col. 1:5-11). Just because we are saved and eternally justified before God (John 10:28), that is no excuse to continue in the sin from which we were saved. Of course, we all sin (1 John 1:8). But the war between the saved and his sin is continuous (Rom. 7:14-20) and it won't be until the return of Jesus that we will be delivered from this body of death (Rom. 7:24). To continually seek sin and use God's grace to excuse it later is to trample the blood of Christ underfoot (Heb. 10:29) and to reveal the person's true sinful, unsaved nature (1 John 2:4; 2:19). (Other verses worth checking out are: Heb. 12:14; 1 Pet. 1:14-16; and 1 Pet. 2:21-22.)

What the cults do with justification and sanctification

The cults consistently blur the meanings of the two terms and misapply the truths taught in God's word. The result is a theology of works righteousness, of earning their salvation which only leads to damnation. This is because by the works of the Law shall no flesh be justified (Gal. 2:16). Man cannot contribute to his salvation (Gal. 5:1-8). Because man is sinful even his best deeds are stained and filthy before God (Isaiah 64:6). Therefore, making a person right before God can only be God's work (Gal. 2:20).
Typically, in cult theologies, a person is not justified (declared righteous in God's eyes) until the final day of judgment when his works are weighed and a reward is given or he is found worthy of his place with God. Thus, a person with this errant theology can not claim 1 John 5:13 as their own which says, "These things have I written unto you that believe on the name of the Son of God; that you may know that you have eternal life, and that you may believe on the name of the Son of God."
Contextually, "These things" refers to loving God, being obedient to Him, belief in Christ, and eternal life in Jesus. Therefore, 1 John 5:13 can be considered a test. If you are believing and doing the right things, then you will know if you have eternal life. Can a cultist know he has eternal life? No. He cannot. But a Christian can.
People in cults don't understand the difference between justification and sanctification. Therefore, they must depend upon a cooperative effort with God to have their sins forgiven which is, essentially, combining the filthy works of man (Isaiah 64:6) with the holy work of God. They don't mix. They can't. Hence, salvation is by grace through faith, alone. To believe anything else is to miss salvation.