Monitoring answers questions you thought to ask in advance: is CPU high, is the queue backed up, did the health check fail. Observability answers questions you didn't think to ask, by giving you enough raw signal — traces, structured logs, high-cardinality metrics — to investigate something genuinely novel after the fact.
Most teams have monitoring and call it observability, and the gap shows up during a new kind of incident, when every existing dashboard is green and nobody can figure out why users are still complaining.
You don't need both from day one. But it's worth knowing which one you actually have, so you're not surprised the first time an incident falls outside what your dashboards were built to show.