Generalization is like a bottom-up approach in which two or more entities of lower level combine to form a higher level entity if they have some attributes in common.
In generalization, an entity of a higher level can also combine with the entities of the lower level to form a further higher level entity.
Generalization is more like subclass and superclass system, but the only difference is the approach. Generalization uses the bottom-up approach.
In generalization, entities are combined to form a more generalized entity, i.e., subclasses are combined to make a superclass.